The government is planning to establish a Credit Guarantee Fund in 2019. As Minister of Economy and Sustainable Development Giorgi Kobulia told BM.GE, the ministry has
already developed the main standards for the fund and its financial mechanisms. Based on these standards, the companies that are unable to attain loans from commercial
banks due to a lack of property to use as a guarantee will be eligible to receive support from the Guarantee Fund.
“Of course, we will have specific criteria that we will use to assess these companies. The criteria will help us determine just how financially effective the companies and their
business plans are. Decisions regarding funding will be made by the banks based on these criteria. We will then check and control the decision from our side. Why banks? –
because the commercial banks that issue the loans will participate in these credit risks and in cases where a business is unable to repay the loan, the banks, along with the
government and the Guarantee Fund, will be partially responsible for sustaining the damages. Within the framework of the Guarantee Fund, this aspect serves as a
motivating factor for the banks, an incentive to give credit to financially viable companies that are likely to repay the loans” – Stated the Minister.
Roman Kakulia, The Chair of the Sector Economy and Economic Policy Committee says he believes a board will be established within the Guarantee Fund for the
purposes of the transparent operation of the credit-finance mechanism.
Based on the revised 2019 government budget, 20 million GEL is allocated within the frameworks of the Entrepreneurship Development programme for the credit Guarantee
Mechanisms targeting SMEs.