Creating a better business environment for rural small and medium-sized (SME) enterprises in Georgia

The Rural SME Development project aims at creating a better business environment for rural SMEs and entrepreneurs in Georgia.
Tiflis, Georgia
Project duration
2021 - 2024
Financed by
  • Swiss Agency for Development and Cooperation SDC

While until 2020, Georgia experienced a period of economic growth, the county’s SME sector underperforms relative to others. In 2018, Georgian SMEs accounted for only 29% of employment and 33.2% of value addition compared to global averages of 71% and 67% respectively.

A key source of weak competitiveness can be found amongst rural SMEs. Heavily oriented toward low valued-addition activities including agriculture, agri-processing and trade, rural SMEs contribute only 16% of total SME output. This underperformance in the rural economy is itself both a cause and effect of unequal access to some of the key services and resources upon which a thriving SME sector depends.  The COVID pandemic has also underlined the importance of a better capitalised and supported SME sector.

The Project

A long-term and systemic approach to the challenges facing the sustainable financing of the rural SMEs in Georgia is needed.  The Rural SMEs Development Project focuses on sector resilience and offers a potentially critical lifeline as the sector adjusts to a post-pandemic reality.

Through its MSD approach, it promotes building a more effective and resilient system of rural SME services and support based on a realistic assessment of the capacity and incentives of market actors and project partners to guide and sustain those services. 

The Rural SME Development project aims at increasing rural income and employment in Georgia. The project will support the both the supply and demand-side of the market in order to improve financial and business support services to rural SMEs.

The direct beneficiaries of the project will be SMEs and market players (national agencies, business associations and consultancies) providing business advisory services to rural SMEs. The end beneficiaries will be women and men in rural areas of Georgia, who are SME owners or employees.


  • Enhance access of rural SMEs to bank and state finance by increasing awareness of rural SMEs on financial services, developing & piloting advisory packages for investment plans and loan applications.
  • Support SMEs in increasing their financial literacy and management capacities by promoting strategies for SME management and developing advisory packages.
  • Build capacity and align national agencies, business associations and consultancies with rural SME needs, as well as establishing communication mechanisms among key market players to support the further development of rural SMEs.

Project Partners

  • Mercy Corps
  • The Springfield Centre

Expected Results

  • Provide enhanced access to bank and state finance and enhance financial literacy and management capacities of rural SMEs.
  • Increase capacities of national agencies, business associations and consultancies to be better aligned with rural SME needs.
  • Establish communication mechanisms among market players to better understand and lobby for rural SME needs


Entrepreneurial ecosystems
Women from the South Caucasus – pillars of the society
The diverse role women play in civil society and economic growth is colossal. Acting as farmers, entrepreneurs, workers, or artists, they contribute to vibrant rural and urban communities and viable businesses. Veronika Bakhchoyan is one of the young entrepreneurs who dream big in a small town in southern Georgia.
Entrepreneurial ecosystems
They talked about the challenges facing the industry, for instance what are the ways
in which manufacturers and construction companies can eliminate existing differences
between their communications.
Entrepreneurial ecosystems
"Leave No One Behind" – in focus of Swiss engagement
Georgia is, to this day, an ethnically diverse country with Armenian and Azerbaijani populations concentrated in the Samtskhe-Javakheti and Kvemo Kartli regions. Despite various government and donor-funded initiatives focused on ethnic minorities, they continue to face challenges in creating businesses and accessing financial services.