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Call for Policy Research Paper

The topic of access to finance has been of growing interest throughout the world, particularly in emerging and developing economies. It raises serious concerns that, especially in the developing world, the benefits of financial markets and financial intermediation are not spread equally amongst different groups of economic actors leading to low economy growth rate, poverty and unequal income distribution.

The World Economic Forum`s Global Competitiveness sub-index accounting for the Development of Financial Markets places Georgia in 63rd position, hence putting forward access to finance as an important and ongoing issue. Some of the difficulties faced by the firms are reflected in limited availability of alternative sources of finance, which are particularly important for new and small businesses with low credit history and no collateral. Utilization of financial instruments other than credit is highly limited, as banks dominate the Georgian financial sector and are the primary source of funding for SMEs. Currently, alternative financing is an ongoing issue in Georgia; trade finance is the only one that has gained a relevant role for SMEs, as it is provided by most banks.

The purpose of the paper is to analyze non-banking financial sector of Georgia. The research is expected to look at alternative ways of finance available to SMEs in other Eastern European countries and make a comparison with Georgia - outline successful and unsuccessful practices and which ones are non-existent in Georgian financial markets. The research should give an analysis of several factors that hinder introduction of such alternative ways of financing for SMEs and deter further development of non-banking financial sector in Georgia.

For detailed information please see to the attached file.