A little goes a long way in Georgia

GEORGIA. July 2010 - Dali Chilachava and her family fled their home village in Abkhazia, Georgia, after separatist conflict broke out in the region in 1993. For 12 years they endured extreme poverty, until a microfinance programme helped them to start a small business growing and selling lilies.

In regions of Georgia that were devastated by the 2008 conflict with Russia over South Ossetia, the United Nations Development Programme (UNDP) - with funding from the European Union (EU) - has teamed up with seven local microfinance institutions to assist displaced persons, women entrepreneurs, small-scale farmers, and other socially and economically vulnerable communities in starting small businesses and rebuilding their lives.

Highlights

  • The 2008 war between Russia and Georgia over South Ossetia displaced 30,000 people.
  • A UNDP programme has helped distribute US$2.3 million in the form of 3,000 microloans to displaced persons, half of whom are women.
  • Loan recipients have started micro-business in the agriculture, trade and service industries.

“These loans were the perfect instrument to rekindle dragging local economies, using energy and creativity that were already here,” said Inita Paulovica, deputy head of UNDP Georgia. “From growing lilies to farming trout, start-ups have sprung to life by tapping into existing resources to create new opportunities.”

From July 2009 to June 2010 the programme issued more than 3,000 microloans to people living in the three regions of Georgia hit hardest by the 2008 armed conflict: Shida Kartli, Samegrelo and Mtskheta-Mtianeti.

Beneficiaries of the programme received loans of anywhere from US$400 to US$3,000 to start micro businesses, mainly in the agriculture, trade and service industries. Altogether, the microloans totalled some $2.6 million.

For three-quarters of the recipients, these loans were the first they had ever received, as well as their first opporunity to succeed professionally and improve their lives.

More than half of the microloans went to women and some 70 percent went to small-scale farmers, a tenth of whom were internally displaced persons; individuals who were uprooted during the war and have been unable to return to their home villages.

With a loan of $400 from the EU/UNDP programme, Chilachava and her husband increased their production of lilies in their greenhouse. The small family business now has a strong client base, shipping flowers in cigarette boxes to customers throughout Georgia. They are thinking of applying for another loan to buy more land and build a cooling facility to store their flowers.

“We started four years ago with one little stem, and now you can see the result,” Chilachava said. “It is good to know you have a guaranteed income and your work pays off.”

More than 3,500 people, including many of the microloan recipients, have also participated in hundreds of skills trainings sessions and business consultations organized by the programme to assist them in designing and launching their own small businesses.

 

Source: UNDP Georgia

UNDP-EU Initiative on microfinance in Georgia

In 2009-2011, UNDP and the EU worked with microfinance institutions in Georgia to assist the displaced people, women entrepreneurs and small start-up businesses.

 

The microfinance initiative in Georgia was a way to remedy the economy in the regions affected by the conflict and to assist the displaced and local residents in rebuilding their lives.

 

The programme ran in the three regions of Georgia that suffered most from the armed conflict with Russia in 2008 – in Shida Kartli, Samegrelo and Mtskheta-Mtianeti.

 

With funds from the European Union, UNDP teamed up with seven local microfinance institutions to assist the displaced, women entrepreneurs and small start-up businesses. Micro loans from 300 to 2,000 Euros were provided in the areas of agriculture, trade and services.

 

Most of the beneficiaries never had such an opportunity before. For 75% of the loan recipients this was their first loan ever. With their first success in business, they can move forward to better life.

Read more about the initiative on UNDP Georgia website