Fitch Ratings removes Watch Negative and Affirms Stable Outlook for Crystal

Tbilisi – 22 July 2021: Fitch Ratings published a revised Rating, removing Rating ‘Watch Negative’ (RWN) and affirming Long-Term IDR ‘Stable’ for Crystal. Fitch outlines that rating affirmation reflects Crystal’s continued access to borrowings from foreign lenders in 2Q21, thereby successfully reducing refinancing risk.

The ratings of Crystal reflect its leading position in the Georgian microfinance sector. One of the key indicators removing Rating Watch Negative is related with improved funding profile, as international financial institutions (IFIs) and local banks are developing partnership with Crystal through new credit facilities. During January-June 2021 Crystal received GEL 120 million funding of which 52% came from IFIs.

The rating reflects company profile, asset quality, profitability, other assessment factors and recognitions. Report states that Crystal has been proactive in asset quality management since onset of the Covid-19 related crisis, resulting in 7.6% NPL by May 2021 (initially anticipated 15%). Moreover, Fitch expects NPL to shrink to 6% by the year end. At the same time Crystal’s profitability has recovered after reduction in loan loss reserve and through a switch to smaller, but higher-yielding loans, resulting in GEL 6.8 million net income. Managing profitability has also positively impacted on CAR which constitutes 18.89% as of May’21 per NBG (5,59% higher than current regulatory threshold).

About Crystal:

JSC MFO Crystal (‘Crystal’) is the leading financial inclusion organization and the largest by assets non-banking financial institution in Georgia. It manages the loan portfolio of GEL 363 million, employing more than 1,000 members of staff, operating through 49 branches and serving more than 100,000 unique customers across Georgia. Crystal acts as a platform for economic development providing micro and small entrepreneurs and farmers with innovative financial products and services. Crystal is the first Fitch-rated non-banking financial institution in the region. In December 2018, Crystal received nation’s responsible business award “Meliora“.