Microfinance Brings Hope to Ethnically-Diverse Regions in Georgia
 |
| Brock Bierman congratulates Constanta Director Tamara
Lebanidze at micro-credit office opening |
Brock Bierman, Chief of Staff for USAID’s Europe and
Eurasia Bureau, and Jim Watson, Caucasus Team Leader within
USAID’s Europe and Eurasia Bureau, joined residents
of Akhaltsikhe, in the Republic of Georgia on May 20 in marking
a day of new opportunity. On this day, a leading indigenous
microfinance institution, the Constanta Foundation, opened
the doors of its new branch office, offering shoemakers,
hairdressers, bakers, traders, and other managers of local
small businesses their first real chance to take out loans
to improve their businesses and their livelihoods. At the
opening ceremony, Mr. Bierman congratulated Constanta and
the people of Akhaltsikhe on the new office opening. Bierman
said, “After 70 years of stifling free enterprise under
Soviet rule, it is critical for Georgia’s economic
development to support small business. Constanta’s
efforts will help expand opportunities for the people of
Akhaltsikhe.”
The new office opening in Akhaltsikhe is part of a unique
public-private partnership between USAID and the Baku-Tbilisi-Ceyhan
pipeline consortium. Continuing nation-wide operations supported
through USAID funding, Constanta has received additional
support from the pipeline consortium to open its latest office
in Akhaltsikhe, which is one of the main cities along the
pipeline route.
Akhaltsikhe is important not only because it lies along
the pipeline route. As Georgia struggles with transitioning
to a market economy and maintaining peace in a tumultuous,
multi-ethnic state, Akhaltsikhe embodies an epicenter of
this struggle. The city is located a region where more than
70% of the population is underemployed and two thirds live
below the poverty line. The region has a high concentration
of ethnic Armenians not fully integrated with the rest of
Georgia, and a Russian military base that has been designated
for closure. Many consider the region be a potential tinderbox
for conflict. Improving the economic – and employment – prospects
of the region is one way to ameliorate undercurrents of tensions
and disquiet. The pipeline, and perhaps more significantly,
Constanta’s office opening, will bring new economic
growth opportunities to this remote region of Georgia.
In a tough neighborhood, Constanta is offering new hope.
Launched in January 1997, with support from the United States
Agency for International Development in the Caucasus through
a grant to Save the Children, Constanta has grown to serve
over 16,000 clients in 15 locations across Georgia. 71% of
Constanta’s clients are women and 21% are internally
displaced persons (IDPs).
As banks and larger financial institutions provide lending
to industry and large enterprises, Constanta offers credit
to those women and men who would are not able to get a loan
at a bank. Collateral and minimum loan size requirements
prevent most micro-enterpreneurs from obtaining loans from
formal banks. Constanta’s group lending approach enables
small groups of individual entrepreneurs to guarantee each
others’ loans, bypassing the need for collateral. This
methodology has proven very successful. As a result, Constanta
maintains a repayment rate of more than 98% nationwide and
is able to cover its entire operating expense. While the
loans are small, ranging from $50 - $400, they make a world
of difference to vulnerable people, helping them to make
ends meet, grow their businesses and create jobs.
At the opening ceremony, Constanta Director Tamara Lebanidze
said, “We are pleased to open our newest branch here
in Akhaltsikhe. Using our experience in other towns and cities
across Georgia, we think Constanta can help stabilize incomes
and secure employment. Microfinance improves people’s
lives.” Also taking part in the ceremony were the regional,
Governor Teimuraz Mosiashvili and city mayor, Tamaz Petriashvili.
 |
| Nana Dvalishvili, micro-loan borrower,
with customer |
With seven years experience providing micro-lending services,
Constanta expects to see real changes in people’s lives
in Akhaltsikhe with the new office opening. Below are some
examples of how USAID-funded micro-lending, administered
through Constanta, has changed the lives of entrepreneurs
in other regions of Georgia.
- Nana Dvalishvili is in her fourth loan cycle
from Constanta. With her credit she increased the scale
and volume
of her business and bought a second hand car. Now her son
has a job transporting goods from the warehouses to the
shop, while she sells the goods at their increasingly profitable
store.
- Leila Beriashvili is on her third loan cycle. She
has increased her business’ profitability by buying,
instead of leasing, a table in the municipal market. She
is her family’s
sole breadwinner providing for her disabled husband and
two children at home. Without this income, she would have
no
means to pay for medical services for her husband or education
for her children.
- Valia Sishenko and Lili Avlokhova are
in partners in a lending group and in business. With their
Constanta loan they have
built and operate a small bakery. Earnings from their business
support their children's education and provide the basics
of food and electricity for their large families.
- Gulnara
Merabishvili is a long-time Constant customer and has increased
the size of her business by buying two kiosks
and two tables in the market. She employs two salespersons.
With her business acumen and USAID-funded micro-loans,
Gulnara has generated enough income to be able to send her son to
college.
- Nino Esiava has been receiving micro-loans from
Constanta for almost two years. To supplement her miserly
salary
of $25 per month as a pediatrician at the local Children's Hospital,
she had rented a shop for selling second hand clothing.
One year after receiving her first micro-loan, she is now the
proud owner of the shop and the owner of a successful
business.
Back to Top ^ |
