Access to Finance for SMEs: Alternative Sources of Finance in Georgia


This paper explores the alternative financial instruments that are or could become available to Georgian SMEs. Through the examination of various secondary sources and several interviews with relevant stakeholders, the paper identifies obstacles and opportunities in the path toward development of two asset-based instruments (leasing and factoring) and two equity-based instruments (crowdfunding and venture capital) that currently have limited availability and/or are being discussed by the regulatory authority of the country.

The paper also looks into several innovative practices that are increasingly being implemented around the world to support the creation of alternative sources of finance, namely open banking, regulatory sandboxes, digital banks, and central bank digital currency (CBDC).Based on secondary sources, the paper also includes three case studies on Lithuania, Poland, and Israel. Meanwhile, the paper ultimately provides several recommendations to foster the development of the alternative instruments reviewed in the paper in Georgia.

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