Gov’t offers financial aid to new rural businesses

The Georgian Government is offering thousands of dollars 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, would see people living in Georgia’s rural areas granted with 5,000 GEL as a financial boost for them to implement their business ideas.

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

Details of the program were announced by the Ministry of Economy and Sustainable Development, who introduced the advantages of the program to non-governmental organisations and business representatives, as well as those who were potential implementers of the project.

As well as financial assistance, interested applicants would also have the opportunity to receive technical support to help them develop their business idea, the Ministry said.

Deputy Economy Minister Keti Bochorishvili said the Government had investigated 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,” she 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.”

The director of Entrepreneurship Development Agency, which will oversee the project’s implementation, believed entrepreneurs would receive basic training and education about finance and accounting, including budgeting so their businesses can operate successfully.

"In order to be eligible to be granted finance, the local must invest 20 percent of the granted money himself. It is not [necessary this is only a monetary investment], it could be real estate or technical equipment,” Giorgi Tsikolia said.

He believed the Supporting the Micro and Small Businesses program would allow modern business practices to be implemented in Georgia’s rural regions.

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.

Nino Zambakhidze, chairman of the Georgian Farmers Association which involved 900 farmers from across the country, believed the main advantage of the project was the development of the rural sector and not solely agriculture.

"Employment is very big issue in the rural regions. Also there is lack of services provided,” he said.

"A lot of business-orientated people move to cities in order to make businesses. I believe this project will give them the opportunity to generate their business ideas in their small villages and towns.”

The 27-month project will be funded by state budget money and implemented by local non-governmental and financial organisations. It will kick-off this autumn.

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.