Making SME a priority for Georgia
14 October, 2010
Making SME a priority for Georgia

Georgian Small and Medium Sized Enterprises Association proposes a legislative initiative on purpose to make SME sector a priority in Georgia. The initiative offers establishment of Small and Medium Sized Entrepreneurs’ administration in Georgia focused on promotion of SME sector.
Georgian SME Association (GSMEA) founded just recently and focused to promote Georgian SME sector by word and deed launched a legislative initiative on October 8, 2010. The initiative idea is to adopt the best world experience and create the SME

administration body in Georgia that will be a public law entity and its activity will be tailored on small business.  According to the draft law the SME Administration will work out a special program that will be agreed with Georgian government and approved by parliament ultimately.


The program may include disbarment of guarantee letters and financial sources to insure credit access of SME sector via mediator organizations. All SME sector representatives including start up business may enjoy this preference. Moreover, the SME Administration will be providing with training opportunities for SME sector employees to raise their management  and business plan drafting skills, to consult petty businessmen how to communicate with banks and state institutions.
Moreover the Administration is supposed to work out recommendations and proposals to make SME sector operation as smooth and simple as possible.


It is an open secret that against the backdrop of financial crisis banks shun financing business specifically the petty fries. As an aftermath Georgian SME sector is actually cut out from banking loans to either start or develop business. GSMEA members believe their initiative may have a breakthrough effect in this stagnated situation and push Georgian economy forward.
According to the authors of the SME law, the recent economic procedures globe over and specifically in countries with the transit economy proved  that SME is the most active and mobile sector of economy and the basement to overcome the poverty. It creates jobs and does not require big investments. However Georgia unlike the civilized west still lacks a proper law regulating the SME sector and even proper definition of SME sector. Commensurately Georgian economy is still underdeveloped.
“We propose the model accepted worldwide,” Levan Kalandadze, Executive Director of GSMEA, told Georgian Journal. “In US for example the SME Administration is under the president’s private subordination and gets significant financing from the state budget. All developed countries have this model and make SME sector development as a priority. Unfortunately Georgian state makes statements that SME is the priority in Georgia but does not make actual steps to this end. We still lack clear definition of SME and how it is possible to regulate this sector and outline priorities. It is important to work out a package of bills to fill the legislative gaps in the tax law as well as in the law on entrepreneurs and number of normative acts to streamline SME regulation. And the law on SME sector must become a backbone of this package of bills.”


GSMEA stresses that the tax code definition of small business is controversial. According to tax code, physical law entities with annual turnover of less than 100 thousand are defined as small business and enjoy tax preferences. The definition does not include legal entities that means that  small LLC enterprise like a bakery or beauty salon are taxed similarly to big business like Rustavi Metallurgic Plant or Heidelberg Cement for example. That is extremely unfair Kalandadze believes. The law completely lacks definition of middle sized business.
GSMEA proposes to define all businesses [except joint stock companies] with less than GEL 2 million of annual turnover as small business. Kalandadze thinks that even this turnover is too insignificant as far as in Europe small businesses are defined as companies with less than EUR 10 million.
All the SME sector related issues should be regulated by the SME administration that can be based on public financing as well as on international and private allowances. The regulatory body will be represented throughout Georgia via regional offices and be controlled by government.  A Board Council staffed by 7 members will manage the SME Administration. Boar members are approved by parliament with 4-year office term.
The draft law on SME administration proposes to divert 2% of the state budget on its financing. Non-budgetary financial sources attracted by the Administration will be allocated via banks and micro-financing organizations in accordance with the business plans submitted by SME companies. To this end the Administration is supposed to announce an open tender for commercial banks and select three best proposals. At least 30% of attracted financial sources is recommended to divert on start up businesses.
The draft law is already sent to government and is supposed to go through parliamentary procedures if Georgian government gives consent to the idea.

Print
Other Stories
Inovative and reliable online shop in Georgia - Momitane.ge
Status of Georgia as a business and tourism interesting country is growing from year to year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equiavlent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
13.11.2018
14.11.2018
USD
1
USD
2.7166
2.7166
EUR
1
EUR
3.0602
3.0602
GBP
1
GBP
3.4900
3.4900
RUB
100
RUB
4.0131
4.0131
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
2.7166
EUR
1
EUR
3.0602
GBP
1
GBP
3.4900
RUB
100
RUB
4.0131
November 2018
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