ProCredit Bank’s 20 years of challenges and successes in Georgia and what it means to be a responsible bank
05 August, 2019
ProCredit Bank’s 20 years of challenges and successes in Georgia and what it means to be a responsible bank
“The bank’s 20-year long presence in Georgia was marked by many challenges and success stories. During these 20 years, the bank has been focused on development of small and medium sized businesses, as we think these businesses are the backbone of the country’s economic development,” - Alex Matua, General Director of ProCredit Bank told the Georgian Journal.

In his interview with the Georgian Journal, Mr. Matua summed up the 20-year history of the German bank in Georgia
and discussed future plans and new projects.

Mr. Matua, ProCredit Bank, to our knowledge, the only bank in the Georgian banking sector with a 100% German capital, has been around for 20 years. Looking back, how would you assess the bank’s overall performance?

That’s right, ProCredit Bank has been operating in Georgia since 1999. We have witnessed many significant changes both in the country and in the bank. These 20 years have been full of challenges and success stories.

It is worth noting that ProCredit Bank, being a German investment, appeared in Georgia when the country’s economy and access to financing was underdeveloped, which affected business climate of our country in the late 90s. ProCredit Bank gave businesses a unique access to funding: we financed very small businesses across the country, all regions included. Offering financing and quality services to such companies, in its turn, significantly contributed to economic development, which played a critical role in the growth of the Georgian financial market. It should also be noted that in addition to financial support, the bank’s priority has been to have an open and transparent relationship with customers at every stage of communication, which is one of the most important criteria for a long-term business partnership.

What do you mean by an open and transparent relationship with customers?

An open and transparent relationship implies provision of transparent information to customers. This approach was especially relevant in 2004-2009 - the period of highly competitive banking climate in Georgia. Under such circumstances, our bank’s practice of communicating open and transparent information helped build customer trust.

In addition to the culture of open communication, our priority has always been responsible banking, which meant that we did not encourage irresponsible lending. Overindebtedness is an obstacle for economy, while responsible lending supports healthy and steady economic growth. It was in fact the abundance of consumer and mortgage loans that resulted in the crisis of 2006-2008.

As overindebtedness plagued the country, we responded to it by launching a financial education campaign about responsible lending, aimed at improving public awareness of banking services. Back then, we had internal regulations that are now mandatory for the entire financial sector, for example, we have used the solvency ratio ever since we entered the market. We welcome any development towards reasonable lending in the financial market.
geotv.ge
Alex Matua, General Director of ProCredit Bank

Speaking of overindebtedness, how would you assess the ongoing changes and regulations in the banking sector, how did the newly introduced responsible lending practice affect the bank’s operations, considering that one of the presumed reasons for introducing this practice was fight with overindebtedness?

We need to be careful when discussing responsible lending and fight with overindebtedness so as not to see it as a responsibility of just one party. It is everyone’s responsibility, we think the banking sector must be the first to step up and assume this responsibility.

The idea of responsible lending is to finance a business or an individual through a technology or based on a principle that will not lead the borrower to insolvency. In the long run, this affects the banking sector, including the share of overdue loans. Since 1999, our non-performing loan ratio has been one of the lowest. ProCredit Bank has had a healthy credit portfolio and consistent profitability, even in times of financial crisis. Our return on investment is 14-15%. By lending responsibly, we are rewarded with steady earnings, which is a prerequisite for long-term development.

We have seen increased competition in the financial sector compared to when you first started operation in Georgia. What is ProCredit Bank’s vision and what makes it stand out in the Georgian financial sector?

In these twenty years, ProCredit Bank has been consistently focused on the development of small and medium sized businesses because we believe that these businesses are the cornerstone of economic growth. ProCredit Bank’s German shareholders are committed to supporting economic development, employment and progress, which would be impossible without developing small and medium sized businesses first. Lending to individuals accounts for over 50% of the local banking sector’s credit portfolio, while in our case - 90% of ProCredit Bank’s credit portfolio consists of business loans, which demonstrates ProCredit Bank’s niche – financing SME businesses. In addition to financial support, we are distinguished in the banking sector by our tech-savvy approach and environmental efforts.

For example, we were the first to introduce an electronic signature back in 2011, transparent branches and online transactions. Since 2014, we have offered our customers 24/7 zones equipped with multifunctional devices, and so on and so forth…

Let’s delve deeper into the social aspects of ProCredit Bank’s operation and support of green financing. What exactly does it mean?

One of the aspects of responsible lending is taking care of the environment. This can be manifested in different ways. Firstly, we should look at an organization’s environmental efforts. In ProCredit Bank, we have a special unit that works incessantly to raise employee awareness of environmental issues. We have annual trainings, we implement projects, because if you are calling for environmental friendliness you should be the one setting an example. As of now, 30% of our car park is electric vehicles and every new car that we purchase will be an electric car.

We also have a new project of solar panels and hope that this year we will already be able to generate all the electricity used by the Head Office from a renewable solar energy. Each of our office is energy efficient. Besides, we do our best to encourage our customers to be more environmentally friendly and direct the financing we provide towards green projects. 16% of the projects we finance are energy efficiency projects with a favorable impact on environment. Each proposed project is, among others, assessed from the environmental perspective. We offer preferential terms to the projects with a positive impact on environment.

Access to finance is still seen as a challenge today. The Government has even developed a project towards solution of this problem – a credit-guarantee scheme that became effective on the 1st of April and aims to enhance lending to the business sector. Do you intend to be involved in the scheme?

Guarantee projects are no doubt important for enhancing access to finance. We have been an important part of this project since its initiation due to our experience with the European Investment Fund. Two years ago, we received guarantee funds of 50 million euros from the European Investment Fund to finance innovative projects. This experience has helped us provide recommendations while the credit-guarantee scheme was being developed. At the moment, thanks to the joint support of the European Investment Fund and ProCredit Group, we will be able to support many more innovative businesses. In general, we welcome any project that is designed to improve access to business financing.

When it comes to lending to individuals, what do you have to offer to customers?

In recent years, our strategy has included introducing high quality online services to better serve private individuals. Two years ago, we offered our customers an online platform, ProCredit Direct, allowing them to carry out all kinds of transactions quickly, effectively and, more importantly, safely. This approach is already broadly practiced in Europe and we believe that in Georgia we have the average size customer segment that would find this service convenient. We keep working and plan to offer our customers more innovative services soon.

Security has been a hotly debated issue recently, especially the cases of cyber fraud and personal information security breach. Just how protected should your customers feel?

Any high-quality service offered to customers must be secure. We place top priority on the safety of transactions, and when we introduce a new product or a new service, it is tested for every possible breach of security. Therefore, I am proud to say that our projects and services are accompanied by strong security systems. To prevent or respond to such cases, if any, ProCredit Bank has high-level security systems in place.

What are ProCredit Bank’s current and future priorities and plans?

ProCredit Bank’s current and future projects are generally implemented in two directions: we continue supporting small and medium sized businesses and introduce services that rely on latest technologies for both private individuals and SME businesses.

Related stories:



Print
Other Stories
Korter: Reliable housing property data in Georgia
It's not a simple job to find fresh homes. But when you use the estate choice service Korter, everything becomes distinct.
Rent a car in Tbilisi – Parent.ge
Are you thinking of booking the best vehicles for your next trip at a very reasonable price? If yes, then this is one of the best decisions you can ever make for yourself.
Pleasant Sunday for the whole family – Renewed Sunday’s brunch at The Biltmore Tbilisi Hotel
Summer, the season of endless fun and vacations, has ended and Tbilisi has become a usually crowded city.
GEL devalues, officials show optimism though
Devaluation of the national currency has sent shockwaves among citizens in Georgia. Officials think that the trend will return to its normal frame, though.
Comments on alarming GEL devaluation
The National Bank of Georgia set a new exchange rate, according to which, dollar price became GEL 2.9507 on Tuesday.
Euronews and Silknet sign an MOU to launch “Euronews Georgia”
Euronews and Silknet, Georgia’s leading telecommunications company, are announcing the signing of an MOU in view of launching Euronews Georgia, a news channel and digital platform aimed at a Georgian-speaking audience.
Green Diamond starts to hand over flats to owners as second stage of construction finishes
Second stage of construction of Green Diamond living apartments by MAQRO Construction has finished and process of hand over of flats to owners has started.
Georgian wine tasting in the US came off excellently
Georgian wine tasting in the main cities of the US, New York, Chicago, and Boston went off excellently.
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
Investment Plan for Europe – Additional EUR 800 million for SMEs as EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 800 million to innovative small and medium-sized companies (SMEs),
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
13.12.2019
14.12.2019
USD
1
USD
2.8661
2.8661
EUR
1
EUR
3.1900
3.1900
GBP
1
GBP
3.7821
3.7821
RUB
100
RUB
4.5362
4.5362
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8661
EUR
1
EUR
3.1900
GBP
1
GBP
3.7821
RUB
100
RUB
4.5362
December 2019
Mon Tue Wed Thu Fri Sat Sun
1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31