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Volume 7, No. 3WINTER 2004

Small loans bring big possibilities
for Georgian business owners

By Pascalis “Lee” Papouras, IOCC-Georgia

Left: Manvar and his wife, Nargiza, of Poti in western Georgia, were able to expand their bakery and make a better living for themselves with IOCC micro-credit loans.

Right: Stepane (left), an Armenian farmer who lives in southern Georgia, was able to expand his farm and provide for his family with the help of several IOCC micro-credit loans. Photos: IOCC-Georgia

Tbilisi, Republic of Georgia (IOCC) — There is a time when humanitarian work changes its focus from helping people without opportunities to providing people with opportunities.

That is the nature of IOCC’s ongoing micro-finance program in the Republic of Georgia, where individuals and groups are given opportunities to provide for themselves and their families.

Manvar and his wife, Nargiza, of Poti in western Georgia, have been married for almost 40 years. In the past, Nargiza worked as an accountant at the state trade organization, and Manvar worked as a taxi driver.

After the collapse of the Soviet Union and the civil war in western Georgia, the family was in financial dire straits: Nargiza lost her job, and the family’s only source of income was Manvar’s earnings from driving a taxi.

In 1994, Manvar and Nargiza started their own bakery, but business was not good. In 2003, Nargiza took out a micro-loan from IOCC to buy new equipment for the bakery. The new equipment enabled the Garuchava Bakery to become more efficient and productive, and the loan was paid back on schedule.

Loans to clients in western Georgia are paid back at a rate of about 97 percent. Currently, the bakery produces bread, buns and cookies for local grocery stores and a nearby school.

As the family business improved, the couple also decided to get into farming. In early 2004, they rented 123 acres near Poti and planted corn and soybean. With a promising harvest ahead, the couple hopes that another IOCC loan will help them buy fuel and build a better storage facility.

Stepane, 41, is a farmer of Armenian origin who has taken out a fourth-cycle $1,000 loan from IOCC. Stepane is married and lives with his wife and two sons in Tskruti village in southern Georgia.

In 1999, his father was seriously injured in a car accident. Stepane had to empty his savings account and sell three cows to cover his father's medical bills. His financial situation was desperate. Then he learned about IOCC’s micro-credit project and applied for his first loan. From the $1,500 that he received, he bought six cows. Proceeds from selling dairy products and calves went to repay the first loan, which put him in better financial shape.

He applied for a $2,000 loan to open a grocery in his village in 2001. The small grocery shop began to provide his family with a stable income. The third loan of $2,500 was used to expand the grocery and expand his inventory.

“I am much better off now,” Stepane said, “so I do not need as much as I needed before. For my fourth cycle, I have taken $1,000 to strengthen my cattle farm. I plan to buy more cows. Thanks to IOCC and its credit project, my family is now more secure.”

IOCC began providing business training and small loans to farmers and entrepreneurs in southern Georgia in 1997. The program has grown to more than 1,000 loans worth almost $1 million, allowing people in this former Soviet republic to establish new sources of income and put market economics to work for them.

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