Evaluation of TBC Portfolio Guarantee Georgia

This evaluation was a mid-term evaluation of the Portfolio Guarantee Georgia: a loan Portfolio guarantee between Sida and TBC Bank, for which Sida is the sole donor. 

The purpose of the Guarantee is to facilitate increased lending by the TBC Bank to MSMEs and Start-ups in Georgia, improving both the conditions of and increasing the quantity of these loans, thereby stimulating economic growth in Georgia.

The guarantee structure is  pari passu; i.e. the risk will be shared equally by Sida and TBC Bank However, Sida is willing to share 60 % of the risk if borrowers are women entrepreneurs, Start-ups or if a loan is related to investment that promotes resource efficient and cleaner production purposes. At least 25 % of the guarantee should target Start-ups (owned by either women or men) in the sectors of Agriculture and Agro-business, Manufacturing and Services sectors with a risk sharing solution amounting to 60%. TBC and Sida have decided to develop a revolving facility since the underlying loans are 4-5 years. Without the revolving capability, the average exposure will be quite low.

The purpose of the evaluation was to assess progress of the TBC loan portfolio guarantee (the “guarantee”) , including its financial and development additionality to inform decisions on the value added of increasing the guarantee amount.

The primary intended users of the evaluation were:

• The guaranteed party:  TBC Bank

• Embassy of Sweden in Tbilisi/Sida (Sida’s loans and guarantee unit)

The objectives of this evaluation were to assess the effectiveness (i.e. progress towards the achievement of the expected results under the guarantee as per the agreed results framework), including any unintended results: 

Effectiveness: Is the intervention achieving its objectives?

• To what extent has the intervention achieved, or is expected to achieve, its objectives, and its results? What mechanisms explains the achievement
• Has the intervention led to unintended positive or negative results? If so how and why?
• Have the M&E system delivered robust and useful information that could be used to assess progress towards outcomes and contribute to learning on financial and development additionality? How could the M&E system be approved?
• To what extent has the project or programme generated, or is expected to generate, significant positive or negative, intended or unintended, high-level effects?
• Will it be value added to increase the volume of the guarantee?
• To what extent is the guarantee achieving improvements in lending terms and how does that compare to financial institutions that are not under the guarantee?
• To what extent is the guarantee value added and filing a gap in terms of access to financial services and the various interventions of commercial banks?

The evaluation team additionally added the evaluation criteria of relevance, coherence and sustainability in line with the latest guidance from the OECD/DAC (which were covered to a limited extent) and the following reserach questions: 

• To what extent has this facility been articulated and integrated into existing financial sector arrangements?
• How do users assess effectiveness of loan access and use compared to other available alternatives?
• What have been key effects/outcomes that can be directly and indirectly attributed to the facility?
• What intended effects/outcomes have not been achieved and what are the causes for this?