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The EU to Ease Burden of Bank Loans for Georgian Entrepreneurs

The EU’s financing programme for SMEs will help the Georgian entrepreneurs to move to the European standards under the  Deep and Comprehensive Free Trade Agreement. The program, which is expected to be operational next year, envisages financial encourages  in two main directions, such as to ease bank loans burden for  business and  to provide  advisory assistance.

Roman Kakulia, the State Minister of Georgia for European and Euro-Atlantic Integration, states “Commersant” that  the project aims  to help  new to bring their  activities in line with the  regulations  under DCFTA  as well as to maximally  facilitate trading opportunities which exist today.

Kakulia says it means  financing of interest rate subsidies on loans, as well as protection from exchange rate fluctuations  and taking the risks that may be caused by the devaluation of the national currency.

As for the amount of loan subsidies, Kakulia notes that such details are not specified yet, however, it is possible it will be similar to the government  program’s model, such as “Produce in Georgia” and cheap agro-credit  program.

The criteria by which the companies will be selected are also unknown. In  Kakulia’s words, the Ministry of Economic Development should  work on this issue  and agree the  details with the European Commission that is expected to happen by the end of 2015.

Kakulia says  the new program will support  the small and medium enterprises, as under the DCFTA this is the most sensitive  sector which  development  will be a priority.

There will be no restrictions for entrepreneurs, both agriculture and food processing industry will be involved in the programme.

Kakulia informs that  a total of  EUR 37 million will be allocated for the project in the years 2015-2017. The EU has allocated funds for this project for the associate member states   Georgia, Moldova and Ukraine. Georgia will get 25%  or Euro 37 million of this amount.

Roman Kakulia adds that  the EBRD’s  office is expected to be the principal actor in the program, which previously carried out consulting services within the framework of the EU  programmes.
“The possibilities of the East Invest program which  also was implemented by the  Chamber of Commerce will  be used to establish communication between the business operators”, – says Roman Kakulia.