TBC Bank Credit Line II The project is to provide a credit line and technical assistance (TA) package to TBC Bank to support the development of mortgage lending and to continue the bank''s successful existing program of small and medium enterprise (SME) lending. The funds will be mainly used for real-estate based financing, including acquiring, constructing or upgrading both commercial and residential property, and financing SMEs. The IFC loan would be accompanied by a program of specialized technical assistance  to assist the Bank with appraising, processing and supervising mortgage loans; administering the IFC funds; and developing and strengthening TBC''s policies relating to mortgage loans. It is also envisaged that the TA team could undertake more general activities such as training credit officers on real estate appraisal.       IFC Role     IFC''s roles in this project are:     (a)	Providing term funding    which will help TBC diversify its funding base, and allow it to offer longer-term loans for inherently long-term assets.  There are no other long term sources of funding at present in Georgia - there is no bond market and foreign private banks are not prepared to provide the country with long term funding.     (b)	Developing valuation and mortgage lending expertise   .  The technical assistance team will help IFC TBC Bank to develop its real estate lending program through development, review and validation of the bank''s underwriting criteria.       (c)	Stimulating competition   .  TBC will become the second Georgian bank to offer residential mortgage loans, thus giving consumers a choice and encouraging improvements in price and quality of service by all participants.  It is notable that in the past two years the interest rate and service quality for SME borrowers has improved as competition in the Georgian banking sector has increased.     Development Impact     The IFC mortgage/SME credit line is expected to have an impact on:      (a)	the financial sector:     the IFC loan and technical assistance package will stimulate competition in the nascent residential mortgage market in Georgia. The development of real estate finance will also gradually stimulate demand for other financial services including escrow services, life and hazard insurance, and, potentially in the long term, a bond market through the issuance of mortgage backed securities.  In addition, the credit line will continue to support the competition which has emerged among Georgian banks during the past two years to provide good quality and appropriately priced banking services to SMEs.     (b)	TBC Bank:    IFCs loan and technical assistance will allow TBC Bank to gain expertise within mortgage lending, expand its successful SME lending, diversify its portfolio and continue to develop best practices in underwriting criteria; and      (c)	private Georgian enterprises and individuals:     Small business will benefit from the availability of long term funding.  Individual home ownership will contribute to cementing the notion of private property among the Georgian public and will improve the quality of life for families.  Real estate finance also promotes broader economic growth by stimulating demand in parts of the real sector, including construction.