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Oikocredit becomes Bank Constanta's first foreign shareholder

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17-09-2010

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Oikocredit now holds a 13% share in Georgian microfinance institution, Bank Constanta, making it the bank's first foreign shareholder.

 

The parties concluded the investment recently but have a long-standing relationship with Constanta receiving five Oikocredit loans since 2005, totalling around EUR 4.5 million.

 

Throughout Georgia's 2008 armed conflict with Russia, the country lost many foreign investors and confidence in the economy wavered. Despite the challenges, Oikocredit maintained a solid partnership with Constanta. This equity deal is the most recent vote of confidence in the bank's professional management team and commitment to common social and development objectives.

 

Constanta operates primarily in rural areas and has more recently bene increasing its urban presence. Last year, Constanta obtained a banking license which will enable the bank to implement authorized savings which will serve as a valuable service for clients in remote market centres. Currently, Constanta primarily offers microfinance products but will broaden its scope to include small and medium enterprise financing and other financial services. At the end of 2009, Constanta had 11,500 clients and a portfolio of USD 31.4 million (approximately EUR 24 million).

 

"Oikocredit is delighted to be the first international shareholder in Bank Constanta. We are confident we will continue building on the mission of both organizations and extend the reach of credit and savings services even further," said Oikocredit Regional Director of Eastern Europe and Central Asia, Guillermo Salcedo.

At the end of June this year, 20.3% of Oikocredit's portfolio was in the Eastern Europe and Central Asia region (made up of the countries of the Caucasus, Central and Eastern Europe, Central Asia, Russia and Mongolia). In addition to Bank Constanta, Oikocredit has loans to Georgian organizations Finca Georgia, MFO Crystal and MFO Credo.

 

More news coverage:

• Georgia Today, "Constant gets first international shareholder", Georgia Today, 16 September 2010

 

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