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Lasha Kanchaveli | Co-Founder | Seed Vegan Project, Georgia
More than 99% of all firms in Georgia are micro, small, or medium enterprises (MSMEs), accounting for two-thirds of total private employment and more than half of total business sector turnover. The health of these locally owned businesses and startups are crucial for income generation, job creation, and overall economic stability.
That is why TBC Bank, the largest bank in Georgia and leading lender to small local businesses, has long been a strategic EFSE partner in channelling funding to the country's hardworking entrepreneurs. What is more, in addition to financing, TBC offers extensive, free-of charge non-financial services to support, educate, and even showcase small businesses in an effort to create an environment where entrepreneurship can thrive. Supported by the EFSE Development Facility, TBC Bank's comprehensive business support programme takes a three-pronged approach:
A series of Regional Business Forums were held in major centres throughout the country to bring together financial sector players, public authorities and regulators, and MSMEs themselves to exchange on current trends, challenges, and opportunities in the Georgian business arena. Four in-person events in 2019 and one digital event in 2020 were attended by more than 1,700 participants from around the country to discuss topics ranging from state support initiatives and tax news to best practices in marketing strategy and company culture.
The Startuperi web platform offers both financial and non-financial services to fledgling businesses in the form of loan products tailored to the needs of startups, events and educational activities for launching a business, individual consulting, and networking. Startuperi also provides entrepreneurs with valuable visibility and marketing through social media, blogs, and TV appearances. By the end of 2020, Startuperi had attracted participation from 2,000 startup owners and staff, and enabled loans to 395 newly bankable businesses. Terms for these loans were specifically designed to accommodate startups, with eligibility based on the viability of a company's business model rather than on the availability of collateral. Long grace periods of up to two years particularly took into account the challenges of the current pandemic, enabling entrepreneurs to focus on developing their businesses rather than immediately paying back the financing.
The annual TBC Business Awards spotlight entre preneurship excellence in a nationwide competition that results in high visibility and prizes to support business development. In 2020, five winners were selected from an initial 400 applicants in categories including corporate social responsibility, startup of the year, innovation of the year, and a new category for 2020, "adapting to the new reality". The latter award went to Jujuna, a startup which had just begun market ing its "on-tap" sparkling wine as an approachable, local product when the pandemic hit. Jujuna quickly switched its in-person service model to mainly online marketing and delivery, as well as redesigning the product in a portable packaging to take advantage of additional sales channels, such as supermarkets.
"Georgia is known around the world for our hospitality," says EFSE senior investment officer Ivane Lekvtadze, who was on the awards jury. "This startup showed an ability to react in a quick and agile manner to the new circumstances by bringing Georgian hospitality to consumers right at home." Now, the winners in all categories will benefit from business support in the form of helping them develop their online presence and marketing strategies, for example.
Lekvtadze continues: "Partnering with our long-time collaborator TBC Bank for this entire set of programmes has proven highly valuable for EFSE's objective of fostering a conducive entrepreneurship environment here in Georgia. By offering a combination of financial resources and technical support, we want to ensure that entrepreneurs have access to a wide range of tailor-made solutions that lay a path to their success."
Moreover, such collaboration forms an integral part of EFSE's work to enhance entrepreneurship beyond individual country borders. Impactful strategies to boost MSME development can be exported to other markets in Southeast Europe and the EU Eastern Neighbourhood Region through such international initiatives as NEXT FinTech, the EFSE-hosted conference to strengthen the financial technology sector with a focus on innovative startups. There, TBC Bank shared their engagement with MSMEs with other key players, such as venture capital providers and central bank representatives as well as other financial institutions, to shed light on the practical aspects of fostering a conducive environment for entre preneurship development.
"Building entrepreneurship ecosystems in partnership with strong institutions like TBC Bank, which are influencers and shapers of such ecosystems, is a strategic way for EFSE to generate even more impact," says Dr. Markus Aschendorf, Chairperson of the EFSE Development Facility. "By joining forces to drive the same cause, we can spread experience and expertise across EFSE's regions and multiply our work to support the success of small businesses - and thus the stability of economies as a whole."