Gov’t offers financial aid to small businesses in regions

The Georgian Government is offering thousands in financial aid to people who establish new businesses in Georgia’s rural sector in a bid to stimulate the country’s business environment. 

The 20 million GEL Government-led program titled Supporting Micro and Small Businesses in Georgia, was presented by Georgia’s Prime Minister Irakli Garibashvili, who said interested people would be provided with small but effective grants which would give them the opportunity to start a business.

"It will create income and employment for the rural sector. Only the Government will not create the jobs. We create all conditions. Maybe we are not perfect but we spare no efforts to private sector development. The private sector has to develop the rest,” Garibashvili said.

The program will see individuals living in Georgia’s rural areas granted a maximum of 5,000 GEL and a group of people with a maximum of 15,000 GEL as a financial boost for them to implement their business ideas.

Georgia's Prime Minister Irakli Garibashvili at the presentation of the Government-led program titled Supporting Micro and Small Businesses in Georgia. Photo by PM's Press Office.  

The move would stimulate the country’s business environment and, once a business was established, increase the household income of the people involved.

In the first four months of the 26-month project, interested applicants will take part and pass trainings to learn the basic tools of how to run a business and help them develop their business ideas.

In particular, entrepreneurs would receive basic training and education about finance and accounting, including budgeting so their businesses can operate successfully. The project will be funded by state budget money and implemented by local non-governmental and financial organisations. It will kick-off from November.

Garibashvili believed more than 5,000 people will be involved in the program. Details of the program were announced by the Minister of Economy and Sustainable Development Giorgi Kvirikashvili, who introduced the advantages of the program to Government members, non-governmental and international organisations.

In order to be eligible for the financial support, the interested party must invest 20 percent of the granted money himself. Photo by N.Alavidze/agenda.ge

Kvirikashvili said that they had used top international examples of ways to provide small grants to households to start-up a micro enterprise. "The business sector in the regions of the country is characterised by low productivity and competitiveness,” he said.

"Moreover, incomes generated from the regions are mainly spent in the capital or in other big cities of the country, which weakens the economy in rural areas.”

According to Kvirikashvili, a special Governmental council would be created to monitor the project. Overall, the project will be implemented by local non-governmental organisations.

More than 12 non-governmental organisations have already showed their interests in being involved in the development the program. In order to be eligible for the financial support, the interested party must invest 20 percent of the granted money himself.

The director of Entrepreneurship Development Agency Giorgi Tsikolia said "it was not [necessary to be a monetary investment], it could be real estate or technical equipment.” PM Garibashvili believed the Supporting the Micro and Small Businesses program would allow modern business practices to be implemented in Georgia’s rural regions.

He was confident that there were more resources in the regions than what was needed locally, therefore the potential of exporting Georgian products existed. "The goal of the Government is to replace imports with high quality products and developing our exports,” Garibashvili said.

Small and medium-sized (SME) enterprises made up 99 percent of registered companies in Georgia and half of country’s labour market.

However, the turnover generated in Georgia’s SME sector was only 19 percent, the Ministry of Economy said.

The project aimed to benefit four targeted communities across the country, with the total budget of the project distributed proportionally based on the population of each region.