02.Sep .2022 16:30

How to Support Ukrainian Companies in Georgia? – DFC and Gazelle Finance have all the answers

How to Support Ukrainian Companies in Georgia? – DFC and Gazelle Finance have all the answers
views 370

BMG English will be telling you about an initiative which seems to be very human on the one hand and very timely and pragmatic for Georgia as well, on the other. In Georgia with DFC’s support, Gazelle Finance is taking on additional activities to benefit displaced Ukrainians in Georgia. Natia Janelidze, COO/CIO at Gazelle Finance will provide further details.

Natia, thank you for your time and for taking our questions. DFC and Gazelle Finance announced an economic recovery facility and its aim is to provide technical assistance to those SMEs from Ukraine that have decided to relocate their business to Georgia due to these unfortunate events unfolding in Ukraine because of the war that Russia has started. Please, give us more details on the initiative.

Thank you, Elene. Yes, Gazelle finance and CEO of DFC Scot Natan signed an agreement yesterday that is intended to help companies that are displaced from Ukraine to Georgia. This is the technical assistance facility 2.5 million USD. DFC contributed 1.5 million USD while the other 1 million USD was supported by Dutch IFIs – FMO and DGGF. This facility covers several products: it includes grant component, zero interest loan and commercial investment amount. I will give you simple examples how companies can benefit from this facility.

Yes, please, let’s go through each component step by step so that our viewers and followers have the sense of what this support really stands for in a nutshell.

In the new environment for the company there are lots of things that they need to know – starting from legal framework, accounting and taxing policies, registration issues, access to finance – great component is intended to help those companies to get those kinds of advice from different providers. The second component is the zero interest loan – that can be used for covering operating expenses of the company including salaries temporarily for the staff. And the third one is the commercial capital investment amount that can be used by the company to expand its operations. This is slightly a bigger amount that cannot be covered either by the grant component or zero interest loan. There is no minimum and maximum – all depends on the needs of the company and how it fits this scheme. We are sector agnostic meaning we are open for all the companies operating in each and every sector.

Are there some dominating sectors, Natia where Georgia draws more Ukrainian SMEs?

Absolutely. Unfortunately, it is not an easy possibility for every company to relocate from one country to another. The practice shows that these are mainly the companies from IT or ICT sectors of FinTech companies, but a few Ukrainian companies already had some representation in Georgia. This facility is intended mainly for the Ukrainian companies that have any kind of content related to Ukraine – this could be the relocation after the war or intentions to expand as a Georgian entity as the business cannot be expanded in Ukraine.

As I understand this facility works for the companies that are already based in Georgia. You are not creating any motivation for Ukrainian companies to drain to Georgia, right?

This completely excludes brain-draining from Ukraine. These are the companies that are already displaced from Ukraine to Georgia or are in the process of displacing to Georgia or already have a representation in Georgia even before the war started. Unfortunately, some companies are not able to continue their operations in Ukraine because of the war and this facility only intends to support them, their country and Georgia as well.

Definitely, and that’s a very interesting point that you have touched upon, Natia. I clearly understand corporate responsibility part of all of this and it is our duty I would say - and we all should thank Gazelle Finance and DFC in this regard - to support Ukraine by all means that we have in this very unjust war. But what are some benefits in all of this for Georgia as well – even if we consider that after the war ends and Ukraine wins these companies might decide to return back to their country?

I should start with knowledge sharing: IT and ICT sectors are very well developed in Ukraine, so by providing assistance to these companies in Georgia, Georgian IT and ICT sectors to adopt these knowledge and know-how from the Ukrainian companies.

Direct or indirect contribution is also to support Georgian economy because these companies will be willing to remain at least some portion of their business in Georgia because this is a good country for doing business. Of course they might shift their employees from Ukraine but there still is the possibility of additional employment opportunities for Georgia’s citizens as well.

The support definitely has humanitarian component to it – just to support the country and companies that are in need in this difficult time. And with the support of our investors – DFC, FMO, DGGF – this possibility, this idea was very well supported in a very efficient wave without beaurocracy, and we are in the final stage of executing this project.

The platform on the Gazelle finance website should be a very helpful tool for the companies and for the individuals that are displaced in Georgia to get the information about pretty much everything an individual or a company might need in the completely new environment.

On top of that we know that males are not allowed to leave Ukraine because of the war – so partially it’s also helping displaced women entrepreneurs. We anticipate that most of the entrepreneurs who are coming to Georgia are women. Thus, another big component is to support Ukrainian women entrepreneurs to continue their businesses in Georgia as they choose it to be a safe and good destination for their businesses.