GE2002 – Development of Alternative Financing for MSMEs

PMCG, as a local sub-contractor of Abt Britain Limited, is supporting the Government of Georgia (GoG) by developing a draft strategy for a vibrant leasing industry, which will serve as a tool supporting the growth of micro, small, and medium enterprises (MSMEs), and stimulating fixed capital formation in the country under the Technical Assistance Facility Eastern Partnership (TAF EP), which is a part of the Good Governance Fund (GGF) program implementation mechanism, funded with UK aid from the UK Government.

The project will be implemented in two phases:

1. Analysis of the current and potential leasing market in Georgia, including reviews of the legislative framework and international best practices, including:

• Conducting desk review and analysis of relevant reports and studies of local and international organizations, the existing legal and tax regulatory environment (including all the direct and indirect regulations that may be affecting the industry), as well as respective governmental strategies and decrees on cross-cutting sectors.
• Conducting a review and analysis of relevant research, reports, and studies to identify international best practices for the leasing industry that may be relevant.
• Developing questionnaires and conducting stakeholder interviews and focus group discussions (FGDs) to collect and analyze the views of broader groups of project stakeholders including MSMEs (including those run by women and vulnerable social groups), leasing companies, CSOs, independent auditors, and lawyers.
• Based on desk review, interviews, and FGDs, carry out analysis of information on current demand, estimate the potential market size to be targeted, and document the viewpoints of key stakeholders on existing problems and possible areas for intervention.
• Based on best international practices, develop an assessment report on the existing tax and regulatory environment, including all the direct and indirect regulations that may be affecting the industry.

2. Elaboration of a draft strategy for leasing development, including recommendations on the tax and regulatory framework and a roadmap for the implementation of the recommendations. This will include the following steps:

• Based on initial findings of the assessment phase, drafting recommendations related to the tax and regulatory framework and outlining the strategy.
• In the course of a series of workshops with the WG, elaborate a draft strategy for leasing development.
• Develop a report issuing recommendations related to the tax and regulatory framework.
• Elaborate a roadmap for implementing the recommendations regarding the legal framework and for achieving the goals of the developed draft strategy.
• Present the project documents to a broad group of stakeholders.