The FINANCIAL -- 7 steps that will bring success to SME business in Georgia, consisting of 7 components each of which aimed at SME development, is being offered by TBC Bank together with the International Finance Corporation (IFC), a member of the World Bank Group. Within the frames of this project TBC Bank will offer its clients different non-financial and technological services for free aimed at helping companies accomplish further success.
To make SMEs more competitive and profitable, boosting economic growth across Georgia, a free web platform has been designed by TBC Bank and IFC. SME Toolkit, an innovation of IFC, developed in partnership with IBM, will provide smaller businesses with tools and educational resources that will support their day-to-day operations from the start-up stage to expansion. This web platform, now available in Georgia at www.tbcbusiness.ge, is tailored to the local market and will provide businesses with practical guidance in areas like accounting, access to finance, and human resources.
The components of the business support programme are as follows: Free trainings for the representatives of SME businesses; Educational web platform including different news resources for the representatives of SME businesses; Professionals’ conferences, which give the opportunity to share experience and stimulate communication; Free consultations for individuals from different spheres; Internet banking for legal entities; Mobile banking for legal entities; SMS service for legal entities.
“If the client is strong the bank is strong as well. Otherwise the mechanism does not work,” said Mamuka Khazaradze, Founder and Supervisory Board Chairman of TBC Bank. “It was time to offer the business community a platform that would give them the opportunity to develop their businesses faster and more effectively. The main challenge to developing SMEs in Georgia is the lack of communication and lack of information. That is why we designed the web page, which is a unique chance for the business community to get answers on all subjects that might be of concern to them. The Bank serves around 43,000 legal entities, which significantly contribute to the country’s economy. Within the framework of the business support programme TBC Bank aims to stimulate and strengthen Georgian SME business,” he added.
The first component of the project - free trainings for the representatives of SME business, was held in May 2013 in which about 1,000 companies took part. The training was organized with the support of the Asian Development Bank (ADB). Topics included finances, marketing, and human resources. Only the representatives of TBC Bank’s client companies were eligible to attend the courses, in particular decision-making people from these companies such as their founders, directors and managers.
“Times are changing and we see now that loans and deposits alone are not enough to create a favourable business environment,” said Vakhtang Butskhrikidze, TBC Bank CEO. “Access to finance was one of the difficulties for SMEs in Georgia, but we see that interest rates on loans are reduced and this trend of reducing rates is continuing. SMEs in Georgia now face new challenges like improving skills and knowledge. SMEs cannot afford to get the kind of useful information which is generally very expensive to acquire. We offer it for free however through the web portal, which gives SMEs the possibility to ask Georgian as well as foreign professionals and consultants any question they may have. I think they will mostly be interested in the areas of finances, audit and the tax system. The SME segment has always been a priority for TBC Bank as small and medium businesses contribute greatly to the country’s economic development,” he added.
IFC’s SME Toolkit, launched in 2002, is now available in more than 40 countries and 17 languages. Since the programme’s launch, SME Toolkit websites have been visited by nearly 20 million people across the developing world.
“This is our first SME Toolkit platform launched in partnership with a financial institution in Europe,” said Patrick Luternauer, IFC’s Regional Manager for Sustainable Business Advisory in Europe and Central Asia. “It is a vital part of IFC’s efforts to make global knowledge available to private companies in this region, which will help them grow and drive economic development. We have the vision not only to provide money and finance but also to offer non-financial services like advice and training as an additional service to clients. People in Georgia like to use the internet and work with new media. We are told that Georgians like Facebook very much and they have high internet penetration. So this is an ideal platform for us to test this project in Georgia,” he added.
“50 to 60 percent of new small and medium size companies do not survive beyond about the first three years of their existence, not only in Georgia but throughout the world as well. The many problems financially and on the market affect business development in many cases. It is one thing to have a brilliant, innovative idea for a business but it is quite another thing to bring it to fruition and successfully implement it. You need certain financial and management skills to achieve this. These are the obstacles that many inexperienced entrepreneurs are facing. We try to give them very useful tips which will give them the knowledge on how to do a financial analysis and many other simple tools. It does not mean that it is a guaranteed recipe for success, you still need to work hard but at least it should help. TBC hopes to have more clients and better clients,” Luternauer said.
SME business remains one of the leading segments of the country’s economy, according to Ketevan Bochorishvili, Deputy Minister of Economy and Sustainable Development of Georgia. Around 500,000 people are employed in the Georgian business sector, the largest share of which is made up by people employed in small and medium size business enterprises.
“This sector has big perspective for growth and development. Starting a business is very important. But its growth and development is even more difficult. Programmes like 7 Steps for Success are designed to help SMEs to develop faster. The Ministry of Economy is also working in this direction and will soon create an office which will be oriented on SME development. This office will help start-ups and export-oriented businesses to experience greater success in their work. From next year the Ministry will join this project as well,” said Bochorishvili.
IFC has partnered with TBC, one of the leading banks in Georgia, since 1998 and became a shareholder in 2000. Several other leading organizations are supporting SME Toolkit, including PwC, Ernst &Young, BDO, LeavingStone, Management Academy, the Georgian Federation of Professional Accountants, and Georgia’s Ministry of Economy and Sustainable Development.