The FINANCIAL — According to the official information, small and medium enterprises occupy 17% of total turnover of Georgian businesses, while the rest goes to big companies. Although people employed in the private sector small business enterprises are five times bigger than the amount in larger ones. But largest employer sector is lacking contact with the government, as CEOs of four major business associations, including AmCham, ICC-Georgia, BAG, EUGBC mentioned in an interview with The FINANCIAL.
Hence, decisive steps were taken to form GSMEA, namely Georgian SMEs association, which will coordinate the dialogue between government, financial institutions and those small enterprises in order to fill the gap of communication and understanding all across Georgia.
The initiative group comprises four most renowned business associations like AmCham-David Lee, EUGBC-Konstantine Zaldastanishvili, ICC-Georgia-Fadi Asli, BAG-Giorgi Chirakadze.
David Lee the head of AmCham, Magticom and now GSMEA’s one of the initiative group told us that Small businesses are more important for the development of Georgian economy than the larger ones. So he’ll actively work for SMEs while before he’d been doing the same for large enterprises, including lobbying to the government.
“There are many large size companies in Georgia, which are good but there is a problem with small size businesses. Therefore they need our help, AmCham is ready to support these enterprises in order to function properly. I hope that once big and small enterprises stand together, the economy of the whole country will grow faster and will result in prosperity all over Georgia.
GSMEA is open for any small businesses in the country. And when the business has the problem government can’t deal with all of them separately. So when these individual problems are combined together and sent to the government, they’ll better understand the problems and take relevant steps to support them.
AmCham has been doing the same thing for long time but for large businesses now it’s time for small enterprises too. Hence, we’ll frequently have meetings with government officials to define problems and together to search for the possible ways out.
In addition, all commercial as well as non-commercial banks will be involved in our support programs and GSMEA will conduct trainings for them as well,” says David Lee in an interview with The FINANCIAL.
Giorgi Isakadze namely the president of the newly created association for SMEs also pointed out the importance of small businesses for the country economy.
“SMEs are number one priority from the stand point of Georgian Economy as well as for the government. They are active members of the society and will create majority of working places in Georgia which ultimately will lead to the accumulation of property and increase in social welfare. For me it’s a great honor to be the president of the association and together with my team I will do my best to develop the strong small and medium size enterprise policy/culture all over Georgia,” says Giorgi.
“GSMEA will become the catalyst for change soon by patronizing businessmen and hereafter lobbying to the government. As a first step we’ll introduce our services to the businessmen and inform more and more small-medium size enterprises about that. Till the end of this year GSMEA will unite 100 companies, and the most importantly we’ll also establish mutual understanding with regards to many government structures. We’ll coordinate dialogue between small businesses and banks by providing trainings to those enterprises on how to best prepare relevant business plans and other format documents. Currently the main problem for small businesses is getting low interest rate loans from banks, but quite often there are cases when they aren’t preparing documents with care thereafter banks are refusing to disburse loans to them,” he adds.
“There has never been any combined force from the public, meaning small enterprises to directly take their concerns to the government as this require individual discussion which is of course impossible. In fact, by now we’ll be supporting them by combining wants of SMEs to take it to the government.
In addition we’ll give recommendations to the government officials about whether what are the demands and concerns of those people taken altogether.
There are organizations formally registered but they don’t really contribute to the development of small enterprise system,” says Giorgi Isakadze, president of the GSMEA in an interview with The FINANCIAL.
As Mr. Fadi Asli noted, he’d long experience dealing with SMEs in Georgia but still the problems were solved few.
“The first reaction of mine when the initiative group was going to be created was skeptical as far as I know with my experience with SMEs that if for instance if you’re pediatrician you can’t ask the kid what he wants, what pain he has. That’s the core of the problem actually.
There were some meetings previously organized where we invited small business owners but least of them came there. Why? because they have their own problems to solve. By the same token, when I heard that Giorgi Isakadze and other successful business people were going to be leading the GSMEA, I decided to join it to lead a successful organization you need as a strong locomotive.
It’s incredible when the nation’s economy stands on 80-100 major companies in Georgia because if something wrong goes on with them then the whole economy collapses and therefore development of SMEs is crucial,” says Fadi Asli.
As Levan Kalandadze, from initiative group of GSMEA, as well as its executive director says the real impact will be substantial if more then 200-300 SMEs will join the initiative and bring their problems to a government eye.
“The first meeting of the initiative group was done in June where we discussed all sorts of issues regarding SMEs where we came to the same conclusion that small business should able to bring those issues to the government by conveying them to us too. So they’ll, themselves, become the mediators with the government which is very important,” says Levan Kalandadze.
“We have major 3C communication principles: with governmental authorities, financial institutions, and the society at large.
The real climate for change can only be made if most of those small enterprises will be united with us. So till the end of this year there are going to be 100 enterprises, while we expect 250-300 organizations to stand together with their challenges.
This organization will stand for lobbying to the government. The communication with them will be the main priority as now we see SMEs are lacking that.
We’ll also help those SMEs in preparing relevant Business plans or other applications for enhancing their presence with the banks.
The first steps will be about the strategy which is partly done now. The board consisting of 7 initiators will gather in the coming days to discuss in more detail what we have already planned,” says Levan Kalandadze in an interview with The FINANCIAL.