RSMED Georgia: Rural Small and Medium Enterprises Development

Project description / objective

Increase employment and income opportunities for rural men and women, contributing to the reduction in poverty and inequalities, including gender inequality.

Market systems focus

Access to finance for rural SMEs

Rural SMEs lack financial literacy, financial management skills, professionalisation and innovation which inhibits their ability or willingness to access finance and operational resilience or growth.

Business support services for rural SMEs

Rural customers remain relatively ‘hard to reach’ for many service providers which provide limited, and relatively expensive, services. This reflects the unpredictable working environment and vulnerability of SMEs as businesses.

Programme interventions

Access to finance for rural SMEs

Financial knowledge and skills

• Establish accounting service provider financial advisory services for RSMEs and Aligning Accountancy Association continuing professional development programmes to build the capacity of accounting service providers serving RSME markets.
• Strengthen rural sales channels for accounting software providers and pilot rural rehabilitation and insolvency advisory services.  

Investments in machinery and technology

• Establish small-scale machinery leasing services. Develop promotional campaigns targeting rural SMEs to promote these services.
• Strengthen performance monitoring and communications practices in national agencies for better targeting of state grants disbursement for investments in machinery and technology.
• Improve the quality of loan applications amongst rural SMEs by establishing a model of tripartite arrangements between financial institutions and accounting services providers

Business support services for rural SMEs

Market access

• Establish a mentoring service for the construction materials sector supply chain.
• Increase the quality of rural tourism accommodation by complying with industry standards.
• Strengthen the rural consulting service market for Food, Health, and Safety compliance in the gastronomy sector.
• Support the growth hubs initiative in rural Georgia in collaboration with Enterprise Georgia.
• Establish a business facility to support rural winery SMEs providing access to sector specific business support services.
• Establish a dairy supplier investment support programme with lead dairy processing firms.

Marketing

• Establish sector-specific marketing services oriented to rural SMEs.

Notable results (systemic change, poverty impact)

NOTE: these are phase targets. Results will be added when available.

Access to finance for rural SMEs

Rural SMEs sustainably grow through better access to finance

• Enhanced awareness and access of rural SMEs to appropriate finance and BSS
• Enhanced financial literacy and management capacities of rural SMEs 

Business support services for rural SMEs

Market players have improved capacities to respond to the needs of rural SMEs for access to finance

• Capacities of national agencies, business associations, consultancies and other sector players increase and align with rural SME needs and demand 
• Communication mechanisms are in place among market players to better understand and lobby for rural SME needs 

Impact on poverty

Through improved financial and management skills acquired by rural SMEs, and improved marketing and market access of  products, rural SMEs in the priority sectors will make more effective and relevant investments. As the sector grows, rural SMEs will enjoy sustainable increased profits leading to retention of employees and the hiring of more people.

We expect:

• 1,500 SMEs to benefit from additional income, reduced costs and/or improved resilience
• 3,600 people to have new or better employment
• 12,600 rural women and men to have seen a tangible benefit that contributes to the reduction of poverty and inequalities

[uploaded December 2022]