Gov’t Working on SME Development Strategy

Government is working on a strategy for the development of small and medium sized enterprises.

Georgia took the abovementioned commitment as part of  the EU Association Agreement and the Deep and Comprehensive Free Trade Area Agreement (DCFTA). According to the action plan, the strategy should be prepared in the current year.

The strategy will be jointly developed by Economy Ministry and Organization for Economic Cooperation and Development (OECD). Enterprise Development Agency is also involved in developing the document. According to  George Tsikolia,   the initial version of the strategy is prepared, however, it needs to be perfected. In Tsikolia’s words,  the strategy focuses on  three main strands.

One of them is development mechanisms for small and medium businesses  to identify the problems and ways of their solving? One of the most acute problems is the lack of knowledge of the SME representatives.

Tsikolia notes that management methods and technologies in Georgia do not meet modern standards that leads to   high losses and  low productivity. Director of Entrepreneurship Development Agency says that small business development is hindered due to  the lack of modern management methods.

The second strand of the strategy is a problem of   access to capital. Tsikolia explains  that in all countries  small businesses face problems in establishing  relationships with financial institutions and for this reason  exist institutions to assist small and medium businesses in  attracting  capital.

The third strand  of the strategy is a political component. In this case, the strategy is to determine the key decisions that should simplify the development of small and medium businesses.

Tsikolia focuses on the second problem. In his opinion,  procedures are complicated in terms of the bankruptcy announcement, which also need to be improved. According to him, small and medium business strategy will be ready by September when the final version of Georgia’s strategy will be presented   to the OECD.

Business specialist  Maka Samushioa believes that small and medium business covers a lot of different segments, so it is difficult to highlight specific problems.

In her words, she heard numerous arguments about the necessary changes in the law, however, in the  business specialist’s opinion, all details can’t be envisaged in the law.