Micro, small and medium enterprise lending Bank of Georgia actively supports MSME businesses in Georgia by offering them local currency resources, along with foreign currency loans, and by designing the products and services that help them thrive. Over the last couple of years, we have focused on developing a relationship banking model for our Small and Medium Enterprise (SME) clients, improving their banking experience, enhancing their exposure to our digital channels and boosting innovative product offerings. In 2019, we plan to open a Bank of Georgia’s Business branch, where well trained relationship bankers will offer one-stop-shop banking and advisory services to our business clients. We are dedicated to helping them develop successful enterprises, which is why we plan to also include educational and advisory components in our services. The Business branch will be designed around a similar concept as the affluent segment in Retail Banking – SOLO – and will focus on creating outstanding banking experience for our clients, both in terms of innovative products and business-specific consulting services from a relationship banker. We aim to increase cross-selling opportunities between SOLO and SME segments and already have a dedicated unit in place in order to tap into the existing potential in the SME market. In March 2019, Bank of Georgia offered its business clients a fully updated business internet bank (Business iBank). Moreover, we are in the process of developing a business finance management tool that will integrate accounting software into the Business iBank account of our clients. The aim is to make any interaction of SMEs with the Bank even more comfortable and effortless, with speedier and more automated information and process management. In 2018, the Bank introduced a new payment method “QR PAY” to the local small business market. QR PAY has been designed by the Bank as an alternative payment mechanism to the traditional point of sale terminal for small Georgian businesses that previously relied on cash transactions as a means for their customers to settle payments. In order to connect to QR PAY and enjoy the benefits of cashless payments, small businesses need to have an account with Bank of Georgia. Once connected, they start receiving QR PAY services free of charge for the first year. Thereafter, a service commission is based on the turnover of the enterprise. This is a significant advantage for small businesses with low turnover. For customers who use Bank of Georgia’s mobile bank and a debit or credit card, settling payments with QR PAY is simple and user-friendly. There are already up to 800 small businesses connected to QR PAY. By the end of 2018, we had 195,230 MSME clients, up from 165,781 in 2017, and a loan book increase to GEL 2,176 million in 2018, up from GEL 1,739 million in 2017. Strategic focus Focus on Simple One-stop-shop loyalty and Innovative onboarding and within the Bank Education and best customer product digital channel of Georgia advisory experience offerings capabilities business services branch Leading service provider for MSMEs 195,230 GEL 79mln* GEL 2.2bln GEL 664mln Number Net Loan Client of clients income book deposits up 17.8% y-o-y up 58.2% y-o-y up 25.1% y-o-y up 52.3% y-o-y *Adjusted for Demerger-related expenses and one-off impact of remeasurement of deferred tax balances. 32 Annual Report 2018Bank of Georgia Group PLC