The Asian Development Bank (ADB) has approved a $100 million loan to help the government better mobilize domestic resources to address limited availability of finance for small businesses–a critical obstacle to inclusive economic development–and increase access to long term finance on 31 August. The program agreements were signed by the Government of Georgia and ADB on 1 September.
“ADB will support government reforms to enhance fiscal sustainability and protect social expenditures as well as boost domestic savings and private sector investment to stimulate the economy,” said Tariq Niazi, Principal Public Management Specialist with ADB’s Central and West Asia Regional Department.
Georgia’s economy is affected by the recession and weak economic performance of the regional trading partners, which have reduced investment growth, exports, and the inflow of remittances. GDP growth in 2016 is projected to be modest at 3% before increasing to around 4% in 2017, with continued fiscal deficit. ADB assistance will help Georgia maintain macroeconomic stability, streamline public spending, and expand access to finance. ADB will continue to provide technical support for the development of the new private pension savings scheme, including the preparation of relevant legislation and its operations.
Another key component of the program is to support reforms to improve the adequacy, fairness, and sustainability of the country’s pension system. The reforms will ensure equitable treatment for men and women, allowing both to accumulate sufficient pension assets to have an adequate retirement income for old-age. Women especially are expected to benefit from the program due to the focus on providing local currency financing for small businesses managed by women.
“ADB has supported capital market development and pension systems, key facilitators of economic and social development, through this three-year program,” said Yesim Elhan-Kayalar, ADB’s Country Director. “We are committed to continuing our partnership for Georgia’s robust development.”
Since joining ADB in 2007 Georgia has received $1.9 billion in assistance from ADB, and the value of current ADB programs in the country is over $925 million.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, ADB in December 2016 will mark 50 years of development partnership in the region. It is owned by 67 members – 48 from the region. In 2015, ADB assistance totaled $27.2 billion, including cofinancing of $10.7 billion.