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Access to Green Finance for SMEs in Georgia

image of Access to Green Finance for SMEs in Georgia

Small and medium-sized enterprises (SMEs) play an important role in Georgia’s economy. SMEs provide more than 67% of employment and about 62% of gross value added. Although the environmental footprint of individual SMEs may be low, their aggregate impact in many respects exceeds that of large businesses.

Commercial banks have an important role to play in providing access to green finance, particularly for SMEs. This report reviews the experience with green lending in the SME sector in Georgia. The analysis identifies the main challenges with lending to SMEs for green projects and discusses possible solutions. The report, in particular, looks at the role of the government and the policy instruments it can use to stimulate higher demand for green lending in the SME sector.

English

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Executive summary

The Georgian economy relies heavily on small and medium-sized enterprises (SMEs), which provide more than 67% of employment and 61.5% of gross value added. Georgia performs strongly under the OECD SME Policy Index as the best performing country in the EU Eastern Partnership (EaP) region, with robust SME development policies and frameworks. However, SMEs tend to be clustered in relatively low value-added sectors (e.g. trade, real estate) and face barriers to scale up their operations.

English

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