EBRD and EU support innovative farming in Georgia

The European Union (EU) is providing a €4.8 million (11.5 million GEL) grant to train Georgian bank staff, develop lending strategies for agriculture projects and improve banks’ existing financial products.

The funding would also serve as a way to share the lending risk and introduce innovative financing for agricultural businesses in the same value chain – such as helping to link local milk farmers to larger dairy producers.

Agri-business Lomtagora in southern Georgia was one of 15,352 industry enterprises and farmers who have benefitted from European Bank for Reconstruction and Development (EBRD) credit lines and EU support. To avoid foreign exchange rate risks, beneficiaries can also take out loans in the local currency, the Lari.

"The loan helped me to bring my company to the next level and become more competitive,” said Lomtagora company founder Kakha Lashkhi.

"We plant crops to produce our seeds. The loan allowed us to purchase fertilizers to achieve a better harvest, which in turn resulted in a higher income for our business,” he added.

Lomtagora benefitted from a 100,000 GEL loan (approximately €42,500) under the EBRD’s Georgian Agricultural Finance Facility (GAFF) in 2014. The loan was provided by JSC ProCredit Bank, which was one of five local partner banks of GAFF who provided credit lines, totalling €40 million.

As a result of the additional financial support, Lomtagora was able to construct new grain silos that are equipped with the latest technology to dry, store and sort grains mechanically. At the same time, Lashkhi planned to invest in new seed varieties and to purchase a production line for animal feed.