Deputy Economy Minister highlights importance of “diversified financial instruments” for rapid economic development

Irakli Nadareishvili, the Deputy Minister of Economy of Georgia, on Thursday emphasised the importance of “diversified financial instruments” for ensuring rapid economic development in the country, in comments at a presentation of the Government’s capital market support programme.

Presented by Enterprise Georgia, the state agency promoting entrepreneurship, investment and exports, the programme's objective is to promote the domestic capital market by improving access to finance for small and medium-sized businesses.

The Ministry of Economy said the programme would stimulate the placement of securities and help companies issue bonds, which would attract additional investment resources of up to ₾150 million ($56.08mln) on the stock market by 2024. 

The programme offers co-financing and technical assistance components, which will be available to entrepreneurial entities whose accumulated total income of the previous business year does not exceed ₾60 million ($22.43mln). Additionally, the United States Agency for International Development's Financial Innovation Programme will provide a co-financing component for companies with revenues of more than ₾60 million or if they are operating in the financial sector. 

Enterprise Georgia partnered with the USAID Programme to implement the capital market support programme in the country.

Nadareishvili said the reform was “one of the main structural reforms” implemented by the Ministry in partnership with the National Bank and other agencies. 

Our Ministry has been actively working on the capital market and pension reform in recent years - the new legislation on investment funds was established, the pension reform was launched and is very successfully underway, a number of new instruments were created such as covered bonds, securitisation law, voluntary pension, so-called third pillar, and more. However, for the success of the reform at this stage, it is important to stimulate and support the market with specific tools, we consider this to be the next phase of the reform”, Nadareishvili said.

He also emphasised the importance of medium-sized businesses “understanding the possibilities” of attracting alternative financing. The official stated the development of the capital market had a “very long and detailed” action plan, including the promotion of equity investment funds and the improvement of the pension reform. 

The package of changes will be sent to the Parliament in the next few days, he added. 

The Ministry of Economy said Enterprise Georgia planned to implement a “number of events” that would contribute to the development of alternative financing mechanisms for the development of the capital market.