Dear Investors and Shareholders of Georgian Credit,

The Audit Report 2015 has been released and therefore I would like to outline several factors contributing to the report as a whole. 

GC started year 2015 with extraordinarily high liquidity, which was due to high inflow of new loans from institutional lenders. Starting from February GC initiates aggressive expansion plan of branch chain development in rural regions of Georgia. The expansion meant opening of 8 new branches from scratch and one acquisition of portfolio from another MFO. In very short time period - till the end of 2015 - all new branches (except for Borjomi Branch) achieved break-even point and some of them showed decent profits. Taking into consideration that GC has shifted its strategic focus from urban to rural lending, we think that from the operational point of view 2015 was decisive and successful year for our company. Based on financial results the significant investment into the chain and devaluation of Georgian Lari were crucial factors contributing to the negative annual outcome. It is important to mention, that our infrastructure is currently loaded at approximately 60% which indicates huge growth potential and does not require any significant investments into the development of the chain network in 2016-17. 

The equity adequacy still remains one of the main issues for the company beginning from the second half of 2015: In order to raise more money from the funds the company has to maintain certain leverage. Recent capital increase of GEL 600,000 (April 2016) improved equity ratio and became sufficient to expect additional institutional funding up to GEL 5 Mio in the upcoming months. However, capital increase still remains in the strategic agenda of the company, because the organic growth of equity and its respective debt do not fully cover the increased market demand on GC services.  

On a final note, 2015 was a challenging year keeping in mind the regional economic slowdown and currency exchange rate fluctuation. 4th Quarter of 2015 was operationally positive and the company overall had a positive net income with a good start in 2016 which gives us a very positive and solid outlook for 2016. 

Giorgi Naskidashvili 

CEO