Boosting micro business to fight poverty
26 November, 2013
Boosting micro business to fight poverty
To boost micro entrepreneurship in Georgia and fight poverty in the country, non-governmental watchdogs reviewed programs supporting the micro business and provided recommendations to authorities. The Community Development Center (CDC) and Consulting and Training Center (CTC), in cooperation with Georgian Small and Medium Enterprises Association (GSMEA), implemented the monitoring of special programs aiding micro business development in Georgia since the 1990s, and produced the report on 15 November 2013.
The report is based on analysis of the experience of Georgian
and international organizations supporting micro business activity. It identifies major shortcomings of state policy in Small and Medium Enterprises (SME), and suggests new approaches.
Three major factors were considered during the research: acute poverty, ineffective remedies for that poverty, and the new government’s interest in the SME sector as one of the effective tools with which to overcome poverty. As a matter of fact, the SME sector is considered as the muscle of the economy in developed countries, as it is a driving force for job creation and social welfare.
According to economic analysts, small enterprises are crucial for creating a competitive business climate, alleviating social disparity, and reducing unemployment. This sector is the most flexible and reacts quickly to market trends, easily adopts new products, and is mainly oriented toward the local market.
So the low level of activity in the SME sector in Georgia affects its social and economic picture. In Europe, for example, SME employs 67.1% of the workforce, and its share in Value Added Tax averages 56%, whereas in Georgia SMEs make up just 17.9% of the entire business sector, employ 43% of workers, and its share of VAT is 21.8%.
The research group selected ten small business supporting organizations, and did in-depth interviews with their representatives. The research made clear that grants aiding start-ups in micro entrepreneurship is an effective tool for creating jobs in groups with low social status and income.
SME development grant programs increase access to financial resources necessary to set up businesses, especially in regions where capital is scarcely available due to high interest rates on loans. On the other hand, grants are preconditions for banking credits, since those who have earned grants often have more experience and competence, thus making them better clients for banks.
According to the researchers, the start-up related grant programs are important to raise awareness of entrepreneurship and develop needed skills, especially when non-formal educational opportunities for adults are lacking. And grant programs may last for two to six years, while offering educational and consulting training even before the grants are delivered.
Start-ups also encourage community development, and enhance job creation, service, and product supply opportunities. They facilitate gender balance and raise the social status of beneficiaries.
However, positive results for successful beneficiaries may cause envy and rivalry. Besides, almost half of micro business projects financed through grants are less sustainable in a long-term prospect. But in spite of shortcomings, the research revealed that micro-entrepreneurship programs are an effective vehicle for economic and social integration of poor people into the workforce, and should be encouraged.
Therefore the authors of the research recommend Georgian authorities to boost micro entrepreneurship from both legal and taxation points of view, and also to work out certain incentives to this end.
First of all, a state framework mechanism supporting micro business should be created. This mechanism will insure the effectiveness of each state special program, and will prioritize target groups, work out major challenges and ways to meet them, insure coordination within the state structure, collect data-bases and analyze principles. The state should in addition work on educational and consulting programs, and create access to start capital through grants or subsidized credits. Finally, the authors of the report emphasized the importance of implementing micro entrepreneurship programs at the level of municipalities.

Print
Other Stories
The most wanted fruits from Georgia
The fruit exportation has decreased in Georgia. According to Geostat (National Statistics Office of Georgia), this year, up until May Georgia exported 25 939 300 USD worth of fruit – 6 771 300 USD less than in 2018.
Investment Plan for Europe – Additional EUR 800 million for SMEs as EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and ProCredit Group are providing an additional EUR 800 million to innovative small and medium-sized companies (SMEs),
Everything of comfortable life in one space – Second part of construction of one of the largest apartment complexes finished in Tbilisi
Apartment in ecologically clean environment, thousands of square meters of green yard, swimming pools, places for various sports activities, treks for walking and running, commercial spaces – all these available in one space is not a fantasy.
Batumi awarded Europe's Leading Emerging Tourism Destination 2019
World Travel Awards Europe Gala Ceremony 2019 took place on the 8th of June in Madeira, Portugal.
Coca Cola to open new factory in Georgia, will hire female drivers
Coca Cola is opening new factory in Georgia in December.
World's best party supply company now on the Georgian market
The largest party supply store in Georgia - MyDay is launching as the official distributor of AMSCAN from 2019.
Live as a marketing tool and an unprecedented live stream launched by Livetag
Sharing information has become smoother and more versatile in today’s technological world. Recently, live streaming, an online streaming media has become especially popular.
Theme and program of Caspian Energy Forum Tbilisi – 2019 changed
“The 8th International Caspian Energy Forum Tbilisi – 2019, scheduled for June 21, will focus on the development of the Azerbaijan-Georgia relations in the field of economy and energy”,
Misunderstanding over Poti deep sea ports
There was misunderstanding around deep sea ports in Georgia – in Poti.
High demand for dollars or the investment decline – Why Georgian Lari depreciates
$1 equals GEL 2,7470 in the official rate set by the National Bank of Georgia (NBG).
PSP Group confirms negotiations regarding purchasing of GEO Hospitals
PSP Group confirms negotiations regarding purchasing of GEO Hospitals.
New life to be given to Dashbashi Canyon
Georgia’s Agency of Protected Areas is planning to give new life to Dashbashi Canyon in Tsalka (southeastern Georgia).
Who is constructing “Khadori 3” Hydropower Plant in Pankisi Gorge?
Clashes broke out in Pankisi Gorge, Georgia’s northeastern region between special forces and residents
Business Positive – Successful radio program from Radio Positive
Starting point of radio program Business Positive is to meet interesting people, communicate with them and deliver information that is interesting for the audience.
A factory of electric vehicles to be built in Kutaisi
Prime Minister Mamuka Bakhtadze stated that a factory of electric vehicles will be built in Kutaisi at the presentation of the Aigroup business group.
Qvevri-shaped hotel complex to be built in Telavi
A Qvevri-shaped hotel complex is scheduled to be built in the village of Shalauri in Telavi, Kakheti (east part of Georgia).
Georgian designers presented at Fashion World Tokyo 2019
The products of 11 Georgian designers are showcased at Fashion World Tokyo 2019,
Silknet raises $200 million in Eurobond issue
27 March 2019 - JSC Silknet (“Silknet”), one of Georgia’s leading telecommunications operators, has successfully priced a debut $200 million 5-year 11% senior unsecured bonds issue (the “Notes”).
Pistachio trees will be planted in Georgia
Dozens of hectares of Pistachio are planned to be planted in Georgia this year.
Toyota Safety Sense and Hybrid Technology
Toyota Caucasus, has presented two new models the 5th generation RAV4 and the 12th generation Corolla at Rustavi International Motorpark, several days ago.
Bidzina Ivanishvili “became number one oppressor of businesses in Georgia” - ICC Georgia chairman Fady Asly
Mr. Ivanishvili promised the business community to protect them from harassment and pressure, unfortunately his words died with the sunset of that day
The best brands of Belarus will be exhibited on a large-scale exposition in Tbilisi
"The Belarusians like to come to Georgia to relax near the sea in Batumi as well as to stay in sunny Kakhetia."
Don’t treat business like a hooker! - Georgian businessman Vasil Soprpmadze addresses politicians
Businessman Vasil Sopromadze, founder of the company "Fresco", addresses politicians
RAV4 No Compromise and Corolla Set to Impress – Two New Cars Presented by Toyota
Toyota Caucasus, the company constantly aspiring to greatness, has presented two new models the 5th generation RAV4 and the 12th generation Corolla.
Mamuka Khazaradze quits TBC bank, does not sell the TBC Bank share
I made a decision to leave TBC bank where I spent 27 years of my life
PHOTO OF THE DAY
GEL Exchange Rate
Convertor
21.07.2019
22.07.2019
USD
1
USD
2.8845
2.8845
EUR
1
EUR
3.2410
3.2410
GBP
1
GBP
3.6177
3.6177
RUB
100
RUB
4.5787
4.5787
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.8845
EUR
1
EUR
3.2410
GBP
1
GBP
3.6177
RUB
100
RUB
4.5787
July 2019
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31