Finance Minister Criticizes Poor Access to Starting Capital, Extols New Gov’t Reforms

The Minister of Finance of Georgia, Mamuka Bakhtadze, has openly criticized Georgian banks, saying they serve as a “brake” on the economic development of the country.

The Minister stated the main problem in the banking sector is high-interest loans, adding they are hampering entrepreneurship and business development.

"The banking system of Georgia should not be a brake on economic development, but its driving force, but unfortunately in our country we have a reality where banks do not perform this function," he said.

In his interview with Imedi TV, the Minister stressed the interest rate for entrepreneurs is so high that they refuse to take loans from banks for implementing their business ideas and starting new businesses, which negatively affects the development of the economy.

However, following negative reactions from Georgian banks, Bakhtadze softened his critical tone, noting that representatives of the Georgian banking sector are represented on the leading stock exchanges of the world, which is important for the country.

“The banking sector is one of the most successful and important sectors of our economy. But I would also like to note that is important for us to have a rapid growth in other sectors as well. Today, we have the reality that projects and ideas cannot be implemented in many cases due to poor access to starting capital," he said.

Bakhtadze talked about the new initiative of the government, the Starting Capital Reform, highlighting that the main goal of the reform is to promote implementation of competitive projects, which will boost the economy.

He explained the reform will cover start-uppers, small and medium entrepreneurs and Georgian emigrants who have interesting projects and would like to come and implement them in their homeland.

“Together with the banking sector, we will develop the rules of the game, financial mechanisms that will facilitate the development of small and medium businesses as well as startups. The main task of our economic policy is to defeat poverty, which can be achieved through the development of SMEs,” he added.

The Minister said soon he is going to meet the representatives of the ruling Georgian Dream (GD) team and also the opposition parties in order to introduce new initiatives to them.

“I will speak about new ideas and initiatives at Parliament and I will be also ready to answer questions about the new Starting Capital Reform,” said Bakhtadze.

Thea Morrison