JSC MFO Crystal is a dynamically growing Microfinance Organization, supporting local micro entrepreneurs and farmers in realizing their business potential, reaching financial stability and elevating living standards with almost 65% of the company’s loans being disbursed in rural areas.
Company: MFO Crystal Name: Malkhaz Dzadzua Position: CEO Email: director@crystal.ge Web: http://crystal.ge/en/ Address: 72 Tamar mepe Street Kutaisi, Georgia Telephone: +995 431 25 11 22
Mainly focused on micro entrepreneurs and smallholder farmers, living and working in remote regions, Crystal started its pilot micro-lending project in 1998 as a non-profit organization with $10,000 loan fund. Today, after 17 years of successful growth, Crystal effectively serves 40 thousand active borrowers through its 30 regional branches; manages $50 million total assets; and by holding 9% of market share, it is the second largest non-bank microfinance organizations in the country among 70 registered companies.
Additionally fragile political stability, dependence to the import, local currency depreciation and high “dollarization” of economic remain key challenges that are generally facing businesses in Georgia.
Crystal offers a wide range of financial services including: micro loans for start-ups and existing businesses ($900 on average); agriculture loans; housing and consumption loans; currency exchange services; remittances; utility payment services and etc. More than 90% of its funding sources Crystal attracts from international financial markets.
Enhancement of the financial literacy of general population is one of the most effective ways of reducing the risks and problems. Apart from high quality services, responsible business standards and transparency, it is a key element to achieve effective, civilized and high-competitive financial market.
Headquartered in Kutaisi (West Georgia) situated in the South Caucasus region, at the crossroads of West Asia and East Europe, on an important north-south and east-west trade route has therefore been actively involved in trade relations with many countries since the ancient times. Positioned on the coast of the Black Sea, Georgia is a key regional country, through which energy imports to the European Union from neighbouring countries pass. Many international experts consider Transport and Logistics as two really important natural competitive advantages of Georgia because of its unique geographical location as a transit country. Other principal economic sectors are Tourism and Agriculture, due to the country’s specific climate and topography. Georgia strives to base itself upon European values and to achieve political and economic integration with Europe. The consistent and effective implementation of the provisions of EUGeorgia Association Agreement and the Deep and Comprehensive Free-trade Agreement (DCFTA) is a precondition for further deepening Georgia’s European integration process. In last decade, Georgia has become known for its pro-liberal reforms, minimal level of corruption and bureaucracy, easy taxation regime, openness for international investments and light regulatory environment. In 2015, country was placed #15th in the World Bank‘s “Ease of Doing Business” rankings, up from #137th as recently as 2005. Georgian economy experienced GDP growth higher than precrisis periods, with predicted sustained growth higher than most peer countries. The country’s Human Development Index (HDI) value is 0.75, which is in high human development category and is ranked #72 out of187 countries, better placed than other neighboring countries. However poverty remains a major cause of concern with 24% of the population living below the national poverty line and 14% with less than $2 a day. Unemployment level is also high (15%), indicating lower income stability.
74 Acquisition International - November 2015
Euro-Atlantic integration is the mainstay of Georgian foreign policy. According to EIU forecasts, average economic growth will be around 5% next years, thanks to post-election recovery and an overall improvement in the global economic outlook.
Traditionally focused on rural areas, law-income population and smallholder farmers, Crystal mainly serve people who are excluded from classical banking products or have very strict and limited access to financial services. The company’s social mission implies that by being close and easily accessible for costumers everywhere, meet demand and real needs of “un-bankable segments” in order to build long-term, effective and mutually beneficial cooperation with the customers. Actively involved in various international consumer protection initiatives, Crystal recently started “Borrow Wisely” campaign, where the local population is provided for with information brochures and advised on how to borrow wisely, on what to pay attention to while cooperating with banks, what questions to ask before making decisions, how to calculate the optimal size of the loan and etc. Crystal follows the best international microfinance practice models in relation to client service. The main difference from banking approach is the specific methodology of lending criteria and different risk appetite. Carefully analysing borrower’s household income and expenditures, business skills, experience, solvency, social status and then take a final decision is how we come to credit decisions. The company has a very well-organized risk management system and, accordingly, the quality of loan portfolio is much better than that of average in the sector. In a small country with high competition, where 20 banks and 70 MFIs operate for market with just 3.7 million population, it is difficult to achieve and maintain high, long-term competitiveness. However, with 17 years of successful business experience, Crystal is already one of the leading financial companies in Georgia and is steadily increasing its market share at the expense of its direct competitors. The main competitive advantages of the company are: professional human resources; effective management systems; transparent, simple and rapid procedures; a minimal level of bureaucracy and formalities; diversity of customer-oriented products;