Principles and developing tendencies of business credits in Georgia

According to the market economic conditions, micro, small and medium-sized enterprises (SMEs) play a significant role in developing country’s economy and improving the value of life. Promotion of SMEs can positively impact economic problems that Georgian people face. One of the most important problems is unemployment rate, which can be decreased by upholding the small businesses, in this case, an entrepreneur can employ at least 3-5 people and subsequently increase their income, while also employing themselves. In addition, entrepreneurship may be a remarkable driver for national productivity growth that supposedly will reduce import volume and therefore, will have a beneficial influence on trade balance. I think, in the long run, supporting the micro, small and medium-sized enterprises can enhance levels of human welfare and help find best solutions to social and economic challenges.
In our country, formation of micro, small and medium-sized businesses is a contradictory process, which is caused by many reasons: market imperfection, pressure of monopolist enterprises, scarcity of private savings, low level of professionalism, deficiency of practical business education, low level of investment and credit attractiveness and so on. As a result, SMEs represent only one-third of Gross Domestic Product (GDP) of Georgia. Functioning of state institutions in coordination with commercial banks and relevant credit policy is a crucial principle in solving problems and upgrading micro, small and medium-sized business sector.
The work consists of several parts: introduction, three chapters and conclusion-recommendations. The first chapter underlines the importance of commercial banks and their value in the upgrowth of SMEs. The second one notes the role of credit in the development of SMEs and crediting problems. The third one discusses the credit system of Georgia, crediting policy for SMEs and influence of economic crisis on business.