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Creating a better business environment for rural small and medium-sized (SME) enterprises in Georgia

The Rural SME Development project aims at creating a better business environment for rural SMEs and entrepreneurs in Georgia. Strengthening the performance of rural businesses leads to new and improved jobs and increases in income for rural households.    
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Tiflis, Georgia
41.7151377
44.827096
Georgia
Project duration
2021 - 2028
Financed by
  • Swiss Agency for Development and Cooperation SDC
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The Georgian economy has continued to recover from pandemic disruption though the SME sector needs to improve performance, competitiveness and inclusiveness. It is observed that the country’s global competitiveness remains relatively weak, with SME exporters facing substantial barriers.

The share of enterprises owned by women continues to stagnate, with only around a third of newly established enterprises owned by women and youth employment remains problematic with the percentage of young NEETs at 34.6%.

Some of the key problems faced by rural SMEs in that too few strategically invest in productive assets and technologies; that they often cannot utilise investments to improve their productivity and resilience; and the lack of trust between rural SMEs and BSS providers, especially in relation to sharing financial data.

The rural business support ecosystem needs more quality and targeting in financing and business support services in order to stimulate greater SME formalisation as a route to inclusive economic growth and decent work.

The Project

The project focuses on strengthening the eco-system for SME business support services and access to finance in rural Georgia. It is a continuation of the successful Phase I where the Swisscontact-led consortium developed strong collaborative relationships with local stakeholders. These include regional networks of financial advisory services providers, business associations, and state agencies, particularly Enterprise Georgia.

In Phase II (2025 - 2028) the project focuses on the diversification and digitalisation of business services, the strengthening of producer-buyer relationships through engaging lead-firms, improving the targeting and performance monitoring of state-subsidised SME financial support programmes, and exploring models for extending ESG and trade finance to SMEs through commercial banks.

The impact logic comprises of two main outcomes:

Outcome 1: Rural small and medium enterprises grow sustainably and become more resilient through business support services and access to finance:

  • Enhanced financial literacy and management capacities
  • Enhanced access to market for SMEs
  • Improved investments in technology and productive assets

Outcome 2: Market players provide sustainable business support services to improve financial management practices, market access, and access to finance of small and medium enterprises

  • Capacities of national agencies, lead firms, business associations, consultancies and other sector players increased and aligned with rural SME needs and demand
  • Communication and engagement mechanisms are improved to enhance awareness of rural SMEs of appropriate business support services and finance

Project Partners

  • Private sector lead firms
  • State Agencies – particularly Enterprise Georgia and the Rural Development Agency
  •  Business consulting services providers
  • Commercial financial institutions

Expected Results Phase 2 (2025-2028)

In Phase II to project seeks to achieve the following impacts:

  • 4,370 people in rural areas have new or better employment.
  • 1,750 SMEs increase income, reduce costs, and/ or improve resilience.
  • CHF 7 Mio increase in income for rural SMEs, of which CHF 1 Mio goes to small-holder farmers.

These are achieved through:

  • 1,600 SMEs take up appropriate financial products worth CHF 6.8 Mio enabling them to invest in/ improve their businesses.
  • 3,100 SMEs take up business support services with 20 providers offering sustainable products and services to rural SMEs.
  • 2,950 women have positive perception on their influence on business and economic-related decision making.
     

Phase I (2021-2024) Approaches and Impact

Videos
BEAM Exchange

Downloads

From Financial Advisory Services To Job Creation and Resilience: Lessons from the Rural Small and Medium Enterprises Development Project (RSMEDP) in Georgia
787 kB
Leave No One Behind: Access To Finance For Linguistically and Economically Excluded SMEs: Lessons from the Rural Small and Medium Enterprises Development Project (RSMEDP) in Georgia
644 kB

News

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