In Georgia, ADB Helped 13,000 Women Gain Access to Affordable Housing

Since gaining independence from the Soviet Union in 1991, Georgia has made significant progress in terms of gender equality and women's rights. However, as in many countries, prevailing traditional gender roles and norms have influenced Georgian women's access to property and housing.

While women are legally entitled to own and inherit land and property, it is usually the men who are favored with property inheritance, ownership, and administration. The preference for passing land and property to sons rather than daughters is particularly high among ethnic minority families. Low rates of land ownership and lower incomes prevent women from fully benefiting from Georgia’s improving banking services industry, especially in rural areas.

In the Omaraani village in Georgia’s Tianeti district, a popular tourism destination north of the capital Tbilisi, Daro Mikadze and her husband Aleksandre have been planning to host tourists to support their income. Aleksandre is a private artisan with an irregular income, while Daro relies on her old-age pension and limited sales of chicken she breeds for the local market.

Daro wanted to renovate and expand the house she co-owns with her husband to host tourists, but had difficulties mobilizing the funds.

"Our combined monthly income was hardly enough to cover our everyday needs. I wanted to augment our income by offering homestay service for guests, but we had an old and small house only," she says.

Based on 2018 data, women represent a significant proportion of the poorest people in Georgia. About 27% of the population live in households headed by a woman, and female household heads are overrepresented in the bottom 40% of income groups. The female labor force participation rate is 57.3%, much lower than the 78.4% participation rate for men.

While women’s economic participation is more limited compared to men’s, they shoulder a considerable amount of the economic burden, heading 37.3% of households. In this light, women stand to gain from programs that tailor their financial offering to financially marginalized groups in Georgia’s interior regions.

Daro was finally able to secure a loan from Credo Bank in early 2020 that gave her a stronger economic sway in their household, and enabled her to start a lodging business. Her house is now renovated with additional beds for tourists.

In December 2018, ADB approved a GEL 60 million loan ($22.9 million) to Credo Bank for affordable housing finance in Georgia. The bank is a leading financial service provider for households as well as micro, small and medium-sized enterprises (MSMEs) serving 361,000 borrowers, with 81 service centers across the country. The loan came with an accompanying technical assistance grant of up to $1.3 million, designed to improve financial literacy and access to finance for women in rural areas.

Credo Bank investor relations officer Nino Svianadze said the financing partnership enabled them to serve rural households by supporting their renovation needs.

"ADB was a driving force behind Credo’s entry into affordable housing finance, providing us with guidance, funding, and technical assistance. Housing finance requires long maturities in local currency which ADB was able to offer because of its GEL bond program. Similar maturities are not available or they are very costly in the local financial market," Ms. Svianadze said.

"Our partnership with ADB allowed Credo to offer affordable loan products to this marginalized market segment," Ms. Svianadze added, citing Daro Mikadze’s loan of GEL 13,000 (US$ 4,940) as a case in point.

"With the help of Credo Bank, my house has been renovated and I have added seven additional beds in my house. I am now able to host comfortably up to 17 guests, which gives me an additional income of GEL 70-90 (US$27-34) per day," she said. "As a woman, it is very important for me to have access to this funding opportunity, because it empowers me to provide a comfortable life for me and my husband."

Lela Potskhverashvili from Georgia's Gurjaani district says having direct access to Credo financing allows her to expand their home and lead her family financially.

Lela Potskhverashvili also dreamed of expanding and renovating her home. She lives with her family of five in rural Vachnadziani village in Georgia's Gurjaani district. Although she works as a local nurse, she and her husband also depend on income from agricultural activities and producing traditional Georgian wine.

"Agricultural business income, however, is seasonal and can hardly cover our daily costs," said Potskhverashvili. "My married son, his wife and their little baby live with us. We desperately needed to renovate our old home for our growing family, but could not afford it." With a loan amounting to GEL 8,500 (US$3,250) payable in 48 months, Ms. Potskhverashvili was able to expand their living room, creating a more comfortable life for her grandson.

"My husband and I are jointly responsible for the loan repayment, but as a woman having direct access to this financing, I feel really empowered because it gives me the chance to lead the family financially,” said Ms. Potskhverashvili. “We work hard to provide a comfortable life for our family members, and the loan from Credo has been an important catalyst in achieving this goal. Credo has always been very helpful during the loan approval and disbursement process.”

Existing mortgage providers focus on properties of higher value while smaller loans are usually not prioritized due to high credit risks, big collateral requirements, and administrative burden.

Ms. Mikadze and Ms. Potskhverashvili are among the 13,320 active female mortgage and home renovation borrowers in Georgia supported by Credo Bank through ADB’s financing. Credo’s increased lending capacity breaks down financial access barriers that often prevent women from participating in the economy.

Ms. Svianadze noted that housing finance had grown in recent years but was concentrated among affluent borrowers residing in urban areas.

"Because home ownership is viewed as an essential component of financial security and well-being in Georgia, it is imperative for us to support women farmers and low to middle income households to own quality houses that will shelter them and their children in many years to come."