Georgia SME Project Overview

"SME" refers to enterprises along a broad continuum of size and type. In terms of size, several measures are common including employment, assets and revenues. According to Georgian legislation the definition of Small, Medium and Large enteriprises (SME) is as following:

Small Enterprise - average number of employees does not exceed 20 people and the turnover does not exceed 500,000 GEL per annum
Medium Enterprise - average number of employees does not exceed 100 people and the turnover does not exceed 1,500,000 GEL per annum
Large Enterprise - average number of employees exceeds 100 people and the turnover exceeds 1,500,000 GEL per annum

The government in Georgia frequently request assistance in building SME sectors, hoping to address twin needs of reducing poverty and increasing growth. The government rightly recognizes that local business risks being left behind by globalization and technology innovation unless proactive steps are taken to build the competitiveness of these enterprises.

Georgian SME survey project

The Georgian SME Survey Project was launched in May 2004 with the ultimate goal to improve the business-enabling environment for the SME sector in Georgia.

This goal is to be accomplished by providing factual information on the issues facing the sector to the public and the government of Georgia, creating a mechanism for monitoring SME sector development, and contributing to the improvement of the local regulatory and administrative environment including legislation governing SME sector.

To accomplish the goal the project:

- Conducts an analysis of current legislation governing SME sector in Georgia to determine issues of concern to be covered by the survey

- Conducts an unprecedented large-scale baseline survey of 910 SMEs throughout Georgia in order to determine:

the current state of SME development in Georgia
most significant administrative, regulatory, business and financial barriers facing Georgian SMEs

- Develops and disseminates a final report on the survey findings along with proposals and recommendations / policy advice for the Georgian Government regarding changes to the regulatory, administrative, and legislative framework, in which SMEs operate.

As a result of the project:

- The Georgian government will be provided with SME development policy advice based on an independent evaluation and the legislative proposals concerning SME development

- Factual quantitative data on SMEs would enable international financial institutions to use the survey recommendations in developing their future activities/economic policies in Georgia, such as through new loan conditionality

- Mass media receives the survey results and makes them available to the public, stimulating a greater discussion of SME issues in Georgia.

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