Corporate Presentation€¦ · FinAgro 2012 2.8 MFI Alliance Group 2014 1.7 MFI LTD MFO Capital Credit 2015 1.1 MFI Company Overview 2 Path taken by BIG 3rd largest ... Address loans

Corporate Presentation

WWW.BIG.COM.GE

MICROFINANCE OGANIZATION B.I.G.

Tbilisi, Georgia

B I GMICROFINANCEORGANIZATION

ბი აი ჯიმიკროსაბინანსო

ორგანიზაცია

Path taken by BIG

• Unique transformation story

• 4 Pillars: Client Satisfaction, Social Responsibility, Transparency & Financial Sustainability

Audited Financial Statements

• Income Statement

• Balance Sheet

Contents0

Key Financial Results YE20161

2

3




YE’2

01

5Y

E’2

01

6Key Financial Results YE’20161




Path taken by BIG2

Leading MFI

with in depth

local knowledge

Strong

Management

with Proven

Track Record

Transparent

Corporate

Governance

• B I G is one of the leading MFIs in Georgia with an excellent understanding of the local market

• Unique combination of entrepreneurship and discipline

• 8+ years experience in the local microfinance market both at B I G and with other established market players

• In house training center for loan officers and credit administrators

• Institutional and Social Rating exercises

• Publicly available audited financials, regular reporting to miX Market

Unique Story Supported by Compelling Themes




FINANCIAL SERVICE PROVIDER (FSP) PERIOD GLP (m'USD) Org.

ProCredit Bank - GEO 2013 412.4 Bank

CREDO 2015 177.4 MFI

JSC Bank Constanta 2013 167.1 Bank

FINCA - GEO 2015 73.2 Bank

Crystal 2015 45.2 MFI

MFO BIG 2015 11.3 MFI

JSC Georgian Credit 2015 10.1 MFI

Lazika Capital 2015 6.3 MFI

Microcredit 2013 5.0 MFI

Easycred 2012 4.4 MFI

GeoCapital Microfinance Organization JSC 2012 3.1 MFI

FinAgro 2012 2.8 MFI

Alliance Group 2014 1.7 MFI

LTD MFO Capital Credit 2015 1.1 MFI

Company Overview

Path taken by BIG2

3rd largest MFI in Georgia

Operating 10 service centers

Serving c. 7,500 clients

247 full time employees

out of which 122 loan officers

Rated BB-/Stable by MFR, 2013

Rated SB by MFR, 2015

Source: https://www.themix.org

3

1

2

As of Q4’2016

https://www.themix.org/mixmarket/countries-regions/georgia?order=gross_loan_portfolio&sort=desc




Path taken by BIG2

OutreachRegion # of Service Centers GLP, %

Tbilisi 3 45.1%

Rustavi 1 8.5%

Kutaisi 1 14.5%

Telavi 1 8.9%

Akhaltsikhe 1 6.7%

Gori 1 7.7%

Senaki 1 5.0%

Marneuli 1 3.7%




Path taken by BIG2

Company Leadership

Supervisory Board

Management

Zurab DavlianidzeChairman of Supervisory Board

Giorgi AkhvledianiMember of Supervisory Board

Teimuraz JashiMember of Supervisory Board

Zurab Davlianidze has over 10 years experience of working in senior positions in the banking sector. Namely, Zurab has held the

positions of Branch Director and Regional Director at leading financial institutions in Georgia. In the last years, he has successfully

founded several businesses in finance, construction and manufacturing sectors. He holds a Bachelor's degree in International

Economic Relations from Ivane Javakhishvili Tbilisi State University and Master's degree in Business Administration from Caucasus

University.

Teimuraz Jashi has over 15 years of working experience in the banking field. At various times, he held managerial positions in

information technology development as well as corporate banking and credit services at leading financial institutions in Georgia.

In recent years, he has established several successful businesses in the financial field. Teimuraz graduated from the Agricultural

University in Georgia majoring in Banking and Finance.

Giorgi Akhvlediani has been a BIG Supervisory Board Member since 2008. In 1998 he graduated from Ivane Javakhishvili Tbilisi

State University, Faculty of International Economic Relations. Over the years Giorgi has established and manages several

successful companies in the finance, construction and manufacturing sectors.

Giorgi MariamidzeCEO

Giorgi Mariamidze has 8 years of experience in the fields of banking, insurance and microfinance. Giorgi started his career at the

National Bank of Georgia. Within the private sector Giorgi has held leadership positions at financial institutions responsible for

reporting, financial and operations management.

Giorgi holds a BA with honours in Business Administration and Economics from the American University in Bulgaria.




▪ Urban Credit is designed for micro to medium size businesses that operate in urban settings – production

and retail realization of primary consumption goods, cloth & bijouterie retail stores, special machinery

operators. This product is intended for entrepreneurs that have previous experience running similar business

and a certain level of own capital.

▪ Fast SME Credit is a loan product similar to Urban Credit, but it does not require owners to have previous

experience running a business. This product is generally utilized for start-up businesses, but it can be used

partially for improving livelihood conditions as well.

▪ Auto Credit is a short-term consumer loan product that B I G actively utilized in 2009 and 2010. Nature of

this loan product has also evolved and currently auto credits are disbursed both on the basis of vehicle

appraisal and assessment of client’s repayment capacity and utilize declining-balance repayment schedule.

Path taken by BIG2

Focus on Client Satisfaction

Urban Lending




Path taken by BIG2

Rural Lending

▪ Agro Credit is designed for household farmers living in rural areas, since farming is in its

nascent stage in Georgia and absolute majority of the households work on their without

utilizing hired labour. At this point B I G targets safer areas in the agricultural sector, such as

bee-keeping, cattle breeding and small-size greenhouses. B I G offers grace periods for

these product in order for the repayment schedule to match the specific cash flow pattern of

the agricultural activities our clients are engaged in.

The loan can be used for financing any type of farming expenses, including:

▪ Purchase of fertilizers and toxics

▪ Purchase of farming equipment

▪ Renovation of industrial buildings


Ketevan Beburishvili has been involved in beekeeping for 5 years. She

learned this skill from her father. She independently manages her bee farm

and her honey is famous in Telavi and neighbouring villages.

She applied to BIG for support in 2015 after most of her bees died, and she

was left with only 4 beehives from 10. She bought an additional 8 beehives

with the loan from BIG and continued doing her favourite thing. "I have a

desire to enlarge my business, to direct attention not only to the quality of the

honey, but also to the packaging of the product, that's why, I approved BIG's

initiative to help me in honey labelling related matters with pleasure" -

Ms. Beburishvili said.

http://www.big.com.ge/success-stories/l/eng/cid/61#.V_tdT4996Hs

http://www.big.com.ge/success-stories/l/eng/cid/60#.V_tdFI996Hs




Path taken by BIG2

Innovative Lending & Housing Finance

▪ Express Loans is was innovative loan product derived from Active Credit Loan which was introduced to the

market in 2014. The main comfort is that loan application for this product is filled out on the spot via tablet

and is sent to the centralized system, where analysts study the application and take credit decisions. Loan

approval process takes short time, ensuring maximum comfort for the client.

▪ SMS Loan is an innovative product specially lunched to offer a value to the guarantor for Agro or Business

Loans in our institution. SMS Loan has a maximum amount of 500 Gel and a duration of up to a year.

guarantor can claim the pre-approved loan via SMS.

▪ Address loans is a new housing product that was introduced to the market at the end of 2016 and is

designed for homeowners that want to finance their house repair and maintenance projects. Address loan

helps families and their communities improve their living conditions through providing tailored financing

options.





Path taken by BIG2

Agricultural Literacy

▪ Together with development of its agricultural lending, BIG has been

focused on supporting household farms and providing them with farming

education. BIG regularly issues “Agroman” brochure and distributes it to

population in rural areas where we operate. The brochure is prepared by

an in-house agronomist and contains tips and guidance on how to ensure

healthy harvest of various popular crops.

▪ To further promote necessary farming knowledge, BIG organizes annual

trainings on setting up and managing greenhouses for our. The training is

led by BIG’s in-house agronomist, who discusses latest developments in

the area. Such trainings will help our clients to increase effectiveness of

managing their farming activities. Farmers also have the opportunity to

benefit from recommendations made by BIG's invited agriculture sector

specialist anytime.

▪ BIG has been an associate member of Georgian Farmers' Association since

2016. The Association integrates more than 1800 farmers throughout

Georgia. It actively works with governmental, donor and educational

institutions and represents a powerful collaboration between farmers and

parties concerned with the agricultural sector. BIG participates in the

projects implemented for the members of the Association.

Focus on Social Responsibility

Responsible Corporate Citizenship

▪ BIG requires its loan officers to attend responsible sales trainings. The

trainings are organized with the support of Savings Bank Foundation and

led by seasoned trainers with extensive international experience in the

microfinance field. The trainings emphasize the role of responsible financing

both in the context of our organization and sustainable economic

development in general.

▪ BIG is a member of Pro Bono Network, which integrates organizations

wishing to share their appraisals with civic organizations, which work on

social and environmental matters and encourage their employees for

participation in this initiative. BIG participates in provision of consultations

and trainings held for the beneficiaries of the network in various viewpoints:

business strategic planning and management, finances, marketing, human

resources management and other directions.

▪ BIG pays special attention to supporting development of Social

Entrepreneurship in Georgia, BIG sponsors “Students for Social

Entrepreneurship” project held annually by Europe Foundation and CSR

Development Georgia. Project supports competitors with grants and

provides periodical consultations to the winner organizations in financial,

marketing and legislative issues.




Path taken by BIG2

Focus on Social ResponsibilityEnvironmental Policy

Microfinance institution BIG is aware of its responsibility toward environment and therefore developed its triple bottom line approach

and intends to contribute its modest part to environmental protection. Social Performance Committee is in charge of monitoring

implementation of environmental projects and measuring our impact on the environment.

Reducing the internal ecological footprint1

Managing portfolio environmental risks2

Providing environmental non-financial services3

BIG is willing to improve its environmental performance by taking actions internally, at the

institutional level. We seek to improve our waste management. We set objectives and

closely monitoring our levels of energy and water consumption, paper use. BIG raises

employees' awareness of good practices in paper, water, and energy consumption, waste

management.

BIG focuses on the environmental impact at the clients’ level. It consists of screening and

monitoring all loans according to environmental criteria. BIG uses an exclusion list, which

defines the types of activities that our institution will never finance.

Our non-financial services include environmental awareness-raising campaigns by organizing specific training sessions for micro entrepreneurs

engaged in environmentally-sensitive activities. We also raise community awareness through poster and T-shirt distribution.

As part of its social responsibility practices BIG is involved in paper waste recycling project with Coop. Coop is a non-profit social

enterprise that aims to develop a sustainable waste and recycling model and raise awareness for the environment.

http://coop.ge/en/




Path taken by BIG2

Focus on Transparency

▪ Financial Statements - 2015





http://www.big.com.ge/annual_report/l/eng

▪ 2016

MFI BIG Press release – Q3 2016

MFI BIG Press release - Q2 2016

MFI BIG Press release - Q1 2016

▪ 2015

MFI BIG Press release - Q42015

http://www.big.com.ge/quarterly_financial_results/l/eng

▪ MicroFinanza Rating (Social) – 2015 (SB)

▪ MicroFinanza Rating (Institutional) – 2013 (BB-)

http://www.big.com.ge/ranking2/l/geo

Publicly available audited financial statements

Voluntary reporting to miX Market Microfinanza Institutional and Social Rating assessments

Quarterly communication of financial results

http://www.big.com.ge/uploads/investors/mfo_big_llc_financial_statements_by_bdo_2015_en.pdf




http://www.big.com.ge/uploads/investors/mfo_big_llc_annual_report_and_financial_statements_by_bdo_2010_2011_en.pdf

http://www.big.com.ge/annual_report/l/eng

http://www.big.com.ge/uploads/investors/mfi_big_quarterly_results_q3_2016.pdf

http://www.big.com.ge/uploads/investors/mfi_big_press_release_q2_2016.pdf

http://www.big.com.ge/uploads/investors/mfi_big_press_release_q1_2016.pdf

http://www.big.com.ge/uploads/investors/mfi_big_2015_results_en.pdf

http://www.big.com.ge/quarterly_financial_results/l/eng

http://www.big.com.ge/uploads/rating/mfo_big_microfinanza_social_rating_exec_summary_2015.pdf

http://www.big.com.ge/uploads/rating/mfo_big_microfinanza_rating_2013.pdf

http://www.big.com.ge/ranking2/l/geo

http://www.mixmarket.org/mfi/mfo-big




Path taken by BIG2

Financial Sustainability

CONTINUOUS YEAR-OVER-YEAR GROWTH

59%88%

87%

89%

91%

87%87%

5,9

8,8

12,7

17,6

24,5

31,6

38,2

-

5

10

15

20

25

30

35

40

45

2010 2011 2012 2013 2014 2015 2016

Milj

on

i

Total Assets

Cash & Cash Equivalents Net Loan Portfolio Other Assets Fixed Assets

1,8

2,9

3,7

4,6

6,2

8,8

9,3

0,5 0,7 1,1

1,4 1,8

2,4 2,6

-

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

2010 2011 2012 2013 2014 2015 2016

Milj

on

i

NIM Growth

Interest Income Interest Expense




Path taken by BIG2

Financial Sustainability

15,4%9,1%

4,2% 5,1%9,6% 11,1%

2,2%

116,9%

40,0%

17,0%23,8%

44,9% 44,8%

9,0%

0%

20%

40%

60%

80%

100%

120%

140%

2010 2011 2012 2013 2014 2015 2016

Profitability

ARoA ARoE Consumer Loans

61,9%

50,7%

41,9%

36,4% 35,9%38,9%

33,3%

44,2%

39,4%

29,6%26,2% 26,4%

29,2%24,9%

44,0%

38,9%

27,9%

23,7% 26,0% 26,2% 23,3%24,0%

25,9%22,7%

16,2% 14,5% 16,4%19,3%

0%

10%

20%

30%

40%

50%

60%

70%

2010 2011 2012 2013 2014 2015 2016

Key Performance Indicators

Portfolio yield Net Interest Margin

Risk Adjusted NIM Operating expense ratio

STRONG REVENUE GENERATION & ABOVE SECTOR PROFITABILITY RATIOS




Path taken by BIG2

Asset Quality

FOCUSING EFFORTS ON GROWTH IN RURAL AREAS

25% 25% 8% 7% 3% 2% 1%

75%75%

86%

88%89%

88% 77%

9%

10%

21%

4.9

7.2

10.9

15.8

20.9

27.2

32.3

97% 78% 59% 67% 81% 77% 61%

2010 2011 2012 2013 2014 2015 2016

0

5

10

15

20

25

30

35

40

Milj

on

i

Gross Loan Portfolio

Consumer Loans Urban Loans Agricultural Loans USD, %

1,4%

35,7%

39,5%

21,4%

2,0%

Portfolio by Products YE2016

Auto Loan Fast SME Loan

Urban Credit Agro Credit

Active Credit




Path taken by BIG2

0,5 0,9 0,9 1,2 1,2 0,3

0,3 0,2

0,5 0,4

0,1

0,3

0,5 0,3

7,0%7,7%

5,3%

6,3%

5,0%

0

1

2

3

4

0%

2%

4%

6%

8%

10%

2012 2013 2014 2015 2016

Portfolio at risk

Par 30 Restructured, < Par30 Written Off Par30 + Rest., %

Mill

ion

s

DOWNWARD TREND OF AVERAGE LOAN BALANCE WHILE MAINTAINIG PORTFOLIO QUALITY

8,6

5,4 5,6 6,8 7,4

5,1 4,7

190,7%

102,5% 96,7%116,5% 114,4%

61,6% 54,2%

0

5

10

15

20

25

30

2010 2011 2012 2013 2014 2015 2016

Average Outstanding Loan Balance

Average Outstanding Loan Balance Average Loan Balance / GNI Per Capita

Th

ou

san

ds

4881 194 1 726 2 001 2 465

4 663 5 081121 135

258

538

1 709

2 3 4 5 4 9 12

-

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

2010 2011 2012 2013 2014 2015 2016

Number of Active Clients

Urban clients Rural clients Number of Branches

0%

20%

40%

60%

80%

100%

0 12 24 36 48 60 72

GLP Maturity

79%Months




6,9%

25,2%

39,9%

28,0%

Funding Structure – YE2016

Individuals Local Banks Shareholders MIVs

56%

44%

Shareholder Structure

US Investor Georgian Partmers

Path taken by BIG2

Ownership & Funding

As of Dec 31, 2016, the company’s share capital amounted to

1,135,714 GEL, out of which 56% is held by US investor and 44%

is held by Georgian partners.

BIG has a diversified funding structure. Approximately 39.9% of

funds come from shareholders, whereas 25.2%, 28.0% and 6.9% of

the total funds come from local banks, Microfinance Investment

Vehicles and individual investors respectively.

GEL

15%

USD

85%




Path taken by BIG2

Partners

Local Banks

International & Local MIVs

Other




MFO B I G, LLC

Income Statement

(Amounts in GEL)

B I GMICROFINANCE

ORGANIZATION



3

Income Statement 2014 Year 2015 Year 2016 Year

Interest & Fee Income 6,625,572 9,411,057 9,970,482

Interest Expense -1,779,902 -2,370,308 -2,554,603

Net Interest & Fee Income 4,845,670 7,040,749 7,415,879

Other Operating Income 172,041 294,134 332,585

Loan Impairment Charge -75,056 -733,428 -494,129

Net Operating Income 4,942,655 6,601,455 7,254,335

Personnel Expenses -1,653,733 -2,499,066 -3,781,228

Rent Expense -299,981 -330,089 -509,709

Depreciation & Amortization -188,425 -200,561 -282,841

Other Administrative & Operating Expenses -523,777 -911,817 -1,182,634

Total Operating Expenses -2,665,916 -3,941,533 -5,756,412

Gain (Loss) from Exchange Rate Difference 104,049 1,032,447 -449,462

Profit before Income Tax 2,380,788 3,692,369 1,048,461

Income tax expenses -354,702 -587,879 -266,610

Net Profit 2,026,086 3,104,490 781,851




MFO B I G, LLC

Balance Sheet

(Amounts in GEL)

B I GMICROFINANCE

ORGANIZATION



3

Balance Sheet YE2014 YE2015 YE2016

Assets

Cash and Cash Equivalents 2,140,180 2,727,709 1,963,217

Financial instruments at fair value through profit or loss - 65,212 360,437

Gross Loan Portfolio 20,924,326 27,220,643 32,310,065

Loan loss allowance -191,564 -406,290 -435,118

Net Loan Portfolio 20,732,762 26,814,353 31,874,947

Accrued Interest Receivable 485,132 656,976 738,797

Other Assets 103,801 147,234 548,791

Property, Plant, Equipment 842,603 972,093 1,990,029

Intangible Assets 119,977 148,330 210,380

Tax Assets 76,025 105,710 513,874

Total Assets: 24,500,480 31,637,617 38,200,472

Liabilities and Equity

Borrowed Funds 18,795,520 21,986,358 27,817,877

Accrued Interest Payable 41,212 88,409 253,651

Advance payments & Deferred commissions 782,151 851,327

Other Liabilities 63,422 124,183 339,632

Tax Liabilities 128,045 279,745 14,674

Total Liabilities 19,028,199 23,260,846 29,277,161

Equity

Charter Capital 1,135,714 1,135,714 1,135,714

Retained earnings 2,310,481 4,136,567 7,005,746

Net profit / (loss) for the period 2,026,086 3,104,490 781,851

Total Equity 5,472,281 8,376,771 8,923,311

Total Liabilities & Equity: 24,500,480 31,637,617 38,200,472




CONTACTS

Giorgi MariamidzeCEO

Email: [email protected]: (+995 32) 2950950Address: 8 Tamar Mepe ave., Tbilisi 0112, Georgia Web: www.big.com.ge

Archil KajaiaInvestor Relations Officer

Email: [email protected]: (+995 32) 2950950

Address: 8 Tamar Mepe ave., Tbilisi 0112, Georgia Web: www.big.com.ge




mailto:[email protected]

http://www.big.com.ge/

mailto:[email protected]

http://www.big.com.ge/

Documents

Corporate Presentation€¦ · FinAgro 2012 2.8 MFI Alliance Group 2014 1.7 MFI LTD MFO Capital Credit 2015 1.1 MFI Company Overview 2 Path taken by BIG 3rd largest ... Address loans