“The ability to access credit is something you first have to earn. At least that’s how I see it. You want to have everything in place first, like your business, your people, and a good reputation," says Ioseb Tsotsolashvili who has managed to grow his business with support made available under the European Fund for South East Europe (EFSE), and EU4Business.
“I can’t help but smile when people ask me what I do for a living. You should see how their eyes widen when I start by saying that I break rocks and shovel sand,” Tsotsolashvili says with a laugh.
Ioseb’s business is strictly above board: he recycles construction materials, and quite successfully so for close to fifteen years now. His business is located on a 70,000-sqm tract of land he owns just outside Rustavi. Together with his three employees, he takes care of sorting and crushing the construction materials that get delivered from construction sites throughout the Tbilisi area.
Good for business
“We supply sand and rocks for building projects in the area. The economy is gradually picking up again after a few tough years, and that’s good for business,” Ioseb adds.
For years, Ioseb’s strategy was to keep costs down, avoid investment where possible and squeeze out as much as possible from his machinery. That seemed to work for a while, but he soon realised that the huge repair bills were cutting deeper into his already low margins. Because of the downtime, he also had to turn away contracts. Not to mention the payroll he still had to meet.
“It took me a while to see the sense in investing in newer machinery, and securing the loan with Bank Republic was exactly what my business needed.” The USD 3,000 loan Ioseb took out in the summer of 2014, provided by Bank Republic with the support of EFSE and EU4Business, went straight into a refurbished crusher, enabling him to process greater volumes in less time.
European Fund for South East Europe
Part of the EU4Business initiative, the European Fund for South East Europe aims to foster economic development and prosperity through the sustainable provision of additional development finance, notably to micro and small enterprises (MSEs) and to private households, via qualified local financial institutions like Bank Republic in Georgia.
Under the EU4Business initiative, EFSE has disbursed almost 44,000 sub-loans to small businesses like Ioseb’s in Georgia, with an average loan size of almost €12,000.