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Supporting the Rural Economy by Strengthening Local SMEs

Article, 02.12.2025

Rural small and medium-sized enterprises (SMEs) are essential to Georgia’s economic development. They create jobs, support families, and help reduce inequalities between urban and rural areas. But many of these businesses face persistent challenges—from limited access to finance to gaps in financial knowledge and strategic planning.

a wood cutting machine
Wood cutting machine helps entrepreneur finish the job faster and thus increase income ©SDC

SMEs are a cornerstone of Georgia’s economy. From farming and tourism to artisanal crafts, these businesses create local jobs and support families.

In recent years, Georgia has made progress in creating a more supportive business environment. However, many challenges remain, especially for small businesses in rural areas. Access to finance is still an issue, though not always the most critical one. Limited financial literacy, weak strategic planning, and poor risk management often prevent SMEs from using funds effectively or scaling their operations sustainably. Additionally, rural SMEs struggle to access export markets due to limited networks and a lack of knowledge about international standards and requirements.

In 2020, Switzerland mandated a consortium consisting of Swisscontact, the Springfield Centre, and Mercy Corps, to implement the project “Rural SMEs Development in Georgia.” The project assists rural SMEs in accessing finance to foster economic growth, job creation, and innovation within local communities.

Empowering Finservice Audit

Since 2014, Finservice Audit mainly offered basic accounting and tax services. With support from the project, the company introduced new services tailored to the needs of local businesses, including budgeting, cash-flow management, and access to finance services. This helped the company grow in exciting new ways.

They understand the value of financial advice and have become more proactive in finding and helping clients. Instead of waiting for people to come to them, they offer a wider range of services and actively reach out to new customers.  Leveraging its social media presence, the firm has begun actively promoting its services and receiving direct inquiries from potential clients.

The company has also expanded into new areas. They opened offices in high mountainous Svaneti and in the Samtskhe-Javakheti region.  A new branch in Tsalenjikha has helped them reach remote mountain villages and offer special financial services, including services to help people apply for grants targeted at mountainous areas.

As a result of these changes, Finservice doubled its income, gained more clients and employees. Many of these enterprises are central to the livelihoods of rural communities.

Ekvtime Mikenaia and His Family Business

Ekvtime Mikenaia and his family run a small craft business in Zugdidi, in the Samegrelo region of western Georgia. The two brothers create handcrafted wooden and metal items, many inspired by Georgian folklore.

“This wooden backgammon board takes five to six months to complete,” Ekvtime explains. “It’s not just hard physical work—it requires precision, attention to detail, and care.”

The entire production process is done by hand and takes long hours. Initially, the Mikenaia family struggled to get a loan due to poor accounting records and limited financial knowledge.  

This changed when he started working with Finservice Audit.  The local firm helped them organize their financial documentation and calculate the returns they could expect on investments options.

As a result, the family improved their financial profile and soon secured a loan that allowed them to purchase much-needed equipment. That investment significantly boosted their productivity and helped elevate the business.

“In 2024, we received a four-year loan to buy a wood-cutting machine. It increased our production speed by 10–15% and made a real difference to our operations.”

The brothers have worked together for over 25 years. Their children have learned the craft too. One of them, Sandro, even trained at the prestigious David Kakabadze workshop, which once supplied finely crafted components to the luxury Swiss watchmaker Patek Philippe.

Irakli Jologhua’s Nut Processing Business

a beneficiary is explaining how he benefited with project's support
Access to finance is made possible when access to information is provided ©SDC

Irakli Jologhua collects nuts from local farmers in Zugdidi, sorts and dries them, and exports abroad. As demand for Georgian nuts increased, so did the need to scale up the business. Although eager to expand, Irakli lacked sufficient collateral to secure an agricultural loan.

“We needed GEL 450,000 to build a warehouse and purchase a new sorting machine to speed up the production cycle. I didn’t have enough collateral for the loan and wasn’t aware of the government support programs. Thanks to the loan, I bought the sorting machine, which more than doubled our processing capacity and sales. Today, I employ 20 local people and work with 50 nut suppliers,” he says.

The Swiss project’s support to improve Finservice’s financial services offer helped companies better serve entrepreneurs like Irakli.  By offering loan application preparation services, Finservice has enabled entrepreneurs to take advantage of targeted financial products available locally and give them more confidence to invest in their businesses.

These stories show that rural SMEs in Georgia can thrive when support is well targeted and tailored. While access to finance is crucial, Switzerland is promoting a more holistic approach to help rural businesses grow and contribute to sustainable development across the country.

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Last update 27.11.2017