Countries
Armenia, Georgia, Azerbaijan

Local Project Partners
Local banks

Donator
KfW Banking Group

Duration
2003 – 2012

Project description
The project aims at strengthening the financial sector and improving the access to finance services for small and medium-sized enterprises (SMEs). In all three countries, a number of banks have already started lending to SME (either via KfW or other credit lines; in Georgia, a bank was founded that specialises in catering to SME). In order to improve the trust of the public into the financial sector and to further boost refinancing possibilities for credit institutions, a credit guarantee fund (CGF) was first implemented in Armenia and Georgia (2004) and later on in Azerbaijan too (2008).

The CGF guarantees international banks that local banks will fulfil their obligations towards them. Sparkassenstiftung has supported the selection of appropriate partner institutions and helps these institutions to lend to SME according to Western standards. The project also aims at convincing the selected partner banks to introduce international rating.

In Georgia, the project has also helped to identify suitable IT solutions in order to allow for adequate reporting by the partner banks. In Armenia and in Georgia, all available funds have been completely disbursed to the SME target group. In Armenia, the administration of the CGF was awarded to a Project Management Unit at the Central Bank of Armenia, and in Georgia, the European Fund for Southeast Europe (EFSE) took over fund administration. Currently, partner banks in Azerbaijan are still supported in lending to their target groups.