“In Georgia, this sector is severely constrained, representing only 10% of GDP,” said Ms. Bracey. The sector also has limited access to bank lending partly because of small and medium sized enterprises' lack of collateral and proper bookkeeping and financial reporting. In addition, demand for bank credit outpaces supply. In 2006, the gap between supply and demand for credit reached $500 million.
The country's banking sector, however, is beginning to look increasingly at this sector as a promising business opportunity. Enabling banks to provide credit to small and medium sized enterprises, however, requires increased resources.
Georgia is a small country covering 69,700 square kilometers of diverse terrain that includes high mountain ranges and coastal lowlands. Arable land covers only 11% of land area, but the country is rich in natural resources such as forests, water sources and mineral deposits. While not a significant oil and gas producer, Georgia's geographical position makes it a vital link in the oil and gas transit system from the Caspian Sea to international markets.
The country's gross domestic product expanded 9.4% in 2006 after rising 7.7% the previous year mainly on macroeconomic stability, improved business environment owing to several reforms and contributions from the manufacturing, services and construction sectors.
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