Georgia Well Positioned for Sustainable Growth
AFC on the Road – Georgia – June 2026

On my first day in Tbilisi, I arranged a tour to Georgia’s ancient former capital of Mtskheta, about a one-hour drive from downtown Tbilisi. Mtskheta is home to the Svetitskhoveli Cathedral and Jvari Monastery, both of which hold very significant importance to the Georgian Orthodox Church. Both sites have also been recognised as World Heritage Sites by UNESCO.

Svetitskhoveli Cathedral in Georgia’s Historical Capital of Mtskheta

After viewing the beautiful architecture, I made my way to Uplistsikhe, which translates to "The Lord’s Fortress". Uplistsikhe was once a large cave town, and it is said to have had one of the oldest urban settlements in Georgia. The earliest traces of human presence in Uplistsikhe date back to the end of the 2^nd millennium BC, and its earliest remaining structures are from the beginning of the 1^st millennium AD.

Uplistsikhe Historic Rock Town

After spending time at these three culturally and historically important sites, I moved on to the city of Gori, which is the birthplace of Joseph Stalin and therefore attracts a lot of visitors to the Joseph Stalin Museum, which holds various artefacts and paintings about Stalin’s life. The museum compound also consists of the house Stalin was born in and his personal armoured train carriage is on permanent display in the museum’s square.

At the Joseph Stalin Museum in Gori – Stalin’s Personal Armoured Train Carriage

All the sites that I visited on this day had a large number of tourists, both local and foreign, and I guess this is what makes visiting Georgia quite convenient, as one can cover multiple important places within a day.

I was back in Tbilisi by early evening, and on the following morning, I took the train to Batumi, which is on Georgia’s Black Sea coast and is the second largest city in the country. Tourism is a very important part of Batumi’s economy given its location on the Black Sea which attracts a lot of fun and sun-seeking tourists, especially during the summer months.

View of Batumi Boulevard Overlooking the Black Sea

In addition to the sun and sand, Batumi has a vibrant nightlife with its casinos attracting a lot of tourists from nearby countries like Türkiye and the UAE. Hence, Batumi is now also called the “Las Vegas of Georgia” because of its casino scene, while others also call it the “Dubai of Georgia” because of its skyline of tall flashy buildings and its waterfront boulevard.

Lot of Construction Activity Ongoing in Batumi

Batumi has a lot of options for bars and restaurants to choose from, and the Batumi Boulevard, a waterfront promenade along the beachfront, comes to life in the evenings with a lot of energy as visitors enjoy the late sunsets at this time of the year.

Sunset on Batumi Boulevard

Since I was in Batumi, I also took the opportunity to travel by road to Kutaisi, which is Georgia’s third largest city. After getting a brief tour of the city and its history, I had lunch at a small but very famous restaurant which is well known across Georgia because it serves only one dish - delicious kebabs in a juicy sauce with local bread and a mug of draft beer or local Georgian lemonade for only 12 Georgian Lari (USD 4.5).

There are no tables and chairs, and one needs to have their meal standing on one of the small wall-mounted tables. Many locals come in here to grab a quick bite during lunch given the quick service and the good value. This experience was one of my favourites during the trip as this place is classic old school and has been around since 1955 and offers a very local feel of what everyday life is in Georgia.

At the Legendary Bikentias Sakababe in Kutaisi

This is one of the edges AFC offers to investors – being on the ground in our countries to really experience them and not just sit in a conference room in a company’s headquarters.

Taking the train from Tbilisi to Batumi and back takes about five hours each way and is the most convenient and cost-effective way to travel to Batumi from Tbilisi. Georgian Railway offers modern air-conditioned trains with Wi-Fi on board, while tickets can be easily purchased online.

Given the importance of tourism in the country, Georgia is very visitor-friendly with English being widely spoken, especially in Tbilisi and Batumi. Since we were approaching the peak summer season, my hotels in both Tbilisi and Batumi had very good occupancy levels while the streets, especially in Tbilisi and Batumi, were filled with sightseers.

Tourism is an important driver for Georgia’s economic growth, with visitor arrivals totalling more than 6.8 million in 2025, while tourism revenues were USD 4.7 bn in 2025 and accounted for 12.3% of GDP. Georgia has also managed to create a diverse stream of travellers and is no longer dependent on only one jurisdiction.

The Tourism Industry is an Important Driver for Growth in Georgia

Besides Russia, travellers are also now coming in from Türkiye, Israel, and neighbouring countries like Armenia and Azerbaijan. Furthermore, China, India, the UAE, and Central Asian countries are also growth markets for Georgia’s tourism industry. An easy e-Visa application makes it much simpler to attract visitors, which is the case for Georgia.

Top Five Source Markets for Georgia Tourist Arrivals (as of 2025)

Back in Tbilisi, it was now time to get down to business and focus on the actual reason I was visiting the country, which was to meet with our fund portfolio companies and other potential investments and, in general, get a feeling of what is going on in the country. From a tourism perspective, obviously things were buzzing given what I saw in and around Tbilisi, Batumi, and Kutaisi.

The highlight of my company meetings and the key reason to visit Tbilisi was the Investor Day hosted by Lion Finance Group.

Lion Finance Group has transformed into a leading banking institution in the region with two very strong franchises in Georgia and Armenia. Bank of Georgia holds the number one position by market share in loans, while Ameriabank is the leader in terms of loan market share in Armenia.

View of Tbilisi from Rooftop of Bank of Georgia (Lion Finance Group) Headquarters

Lion Finance Group is therefore very well positioned to capture growth opportunities in both Georgia and Armenia, not only because of its very strong position in both markets, but also because it can leverage the economic momentum in Georgia and Armenia.

2025 GDP growth in both Georgia and Armenia was greater than 7%, with a forecast for robust economic momentum going forward as well. Importantly, the drivers of growth for both economies are diverse and not dependent on a few industries or sectors. Both Georgia and Armenia are benefiting from services-led growth with sectors like trade, transportation, tourism, and information technology all contributing to GDP growth. 

In addition to this, both countries are also key to the Middle Corridor project which can drive longer-term investments and growth for Georgia and Armenia given the strategic geographic location with respect to the movement of goods from China to Europe via the Middle Corridor. In these current uncertain geopolitical times, the Middle Corridor has only taken on greater significance, and this bodes well for the Georgian and Armenian economies.

Furthermore, strong economic growth in Georgia and Armenia is backed by an overall stable macroeconomic environment with relatively low debt to GDP and good fiscal discipline. In addition to this, foreign exchange reserves in Georgia and Armenia are now at all-time highs, which reflects the ongoing economic momentum in both countries.

In addition to the macroeconomic backdrop in Georgia and Armenia as well as the strategic outlook for Bank of Georgia and Ameriabank, the investor day also had insights on various key segments like retail banking, SME, corporate, and digital financial services, with key management personnel presenting on their respective business lines.

Overall, we have been happy shareholders of Lion Finance Group as its strategies have been well executed, including the acquisition of Ameriabank in 2024, leading to a very strong outperformance by the stock price, especially in the last two years.

Lion Finance Group has been an Outperformer for the AFC Asia Frontier Fund

After the investor day, a cultural function was organised by the company at the historic Rustaveli National Theatre, where traditional Georgian folk dancers wowed the audience with their spectacular moves, after which we had the pleasure of listening to Georgian folk singers perform a melody of polyphonic tunes, which is a historical tradition in Georgia. It was a remarkable evening at a truly historic location.

Georgian Folk Dancers Giving an Electric Performance at the Rustaveli National Theatre

Georgian Folk Singers Perform a Melody of Polyphonic Tunes at the Rustaveli National Theatre

During my visit to Tbilisi, I also had an excellent opportunity to meet with the management team of TBC Bank Group (TBC) at their headquarters and get their views not only on the bank’s Georgian business but also on Uzbekistan, where TBC is building a digital banking business which, in my view, has a lot of potential.

Though they are facing some regulatory headwinds in Uzbekistan, TBC may have turned the corner here and we could potentially see an improvement in the Uzbekistan business in 2027. Uzbekistan in general remains an untapped consumer opportunity, and TBC’s digital bank in the country is well positioned to scale up its operations in the long term.

Uzbekistan currently has many economic tailwinds, and GDP growth is expected to be a whopping +8.0% in 2026. With an outlook for solid growth and an underpenetrated banking sector, TBC’s Uzbekistan business could potentially become much larger if we can look beyond the current regulatory headwinds.

With TBC Bank’s Management Team at their Headquarters – at the TBC Bank Library

Though TBC’s stock price has faced some pressure because of the headwinds at its Uzbekistan subsidiary, the returns from the stock have been good for the fund since our initial purchase in 2021. Net profit growth has also been impressive over the last five years with an annualised CAGR of 34%.

TBC Bank Group Stock Price has done Very Well for the AFC Asia Frontier Fund

I also had the chance to visit and meet with the management teams of Georgia Capital’s pharmacy and insurance businesses, both of which have the highest market share in Georgia.

Though Georgia has faced some regional and domestic political turbulence in the recent past, the country’s broader macroeconomic fundamentals are on a strong footing, and its attraction as a tourist destination as well as its evolving geographic importance should help maintain stable economic growth rates in the next three to five years. As Armenia also takes advantage of the ongoing stability in and around its borders, economic growth here too is expected to remain robust.

Our AFC Asia Frontier Fund is well positioned to capture the growth opportunities in the broader region via our holdings in Lion Finance Group and TBC Bank Group.

I definitely look forward to visiting Georgia again not only to meet the open and transparent management teams of the listed companies but also to further explore what this culturally rich country has to offer.

If you would like to know more about our AFC Asia Frontier Fund, please find below the links to the latest factsheets and presentation as of 30^th June 2026: 

• Factsheet AFC Asia Frontier Fund
• Factsheet AFC Asia Frontier Fund (non-US)
• Presentation AFC Asia Frontier Fund

I hope you have enjoyed reading our AFC on the Road report. If you would like further information about our AFC Asia Frontier Fund, please get in touch with me or my colleagues.

With kind regards,

Ruchir Desai
Co-Fund Manager, AFC Asia Frontier Fund

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