Access to Green Finance for SMEs in Georgia

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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.



Recommendations for policy makers

The chapter summarises the main conclusions and findings that have emerged from the analysis. It also offers recommendations targeted at policy makers in the government of Georgia. Among other concerns, these touch upon improvements in the macroeconomic situation and investment climate, political and institutional environment, and access to and cost of finance. These include barriers related to issues such as the policy and regulatory environment; the cost of, and access to, finance; energy pricing; and fossil-fuel subsidies.


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