Countries
Armenia, Georgia, Ukraine, Tajikistan

Local Project Partners
ARM: Central Bank, Aregak UCO, Farm Credit Armenia UCO
GEO: National Bank, Crystal MFI, Credo Bank
TAJ: National Bank, Amonatbank, Bank Arvand, Bank Eskhata
UKR: Anisia Credit Union Lviv, Oschadbank

German Partners
Sparkassenverband Westfalen-Lippe
Sparkasse Märkisches Sauerland Hemer-Menden
Ostdeutscher Sparkassenverband
Sparkasse Elbe-Elster
Sparkasse Muldental

Donor
German Federal Ministry for Economic Cooperation and Development (BMZ)

Duration
01.01.2023 - 30.09.2025

A large part of the population in Armenia, Georgia and Tajikistan lives below the national poverty line despite considerable successes in poverty reduction. The difference between urban and rural areas is particularly significant. In rural regions, there is a lack of income prospects. For many people, self-employment is an economic alternative to labour migration to Russia or Europe. Reliable political and economic forecasts are not possible for Ukraine due to the war with Russia. Due to the importance of Ukraine for the global food supply, securing agricultural production plays a prominent role here.

The rural economy in these countries is characterised by small and individual enterprises with often low economic productivity, lack of competitiveness and low capitalisation. There is a lack of business management skills for responsible and risk-conscious business management. Insufficient funds for investments and to hedge entrepreneurial risks increase vulnerability to market fluctuations and external influences. Lack of collateral makes access to financial services difficult. Large parts of the population in the project countries are not yet directly aware of the need to adapt to the consequences of climate change - even though extreme weather events such as droughts and landslides have been frequent in recent years.

The aim of the project is the social-ecological transformation of the economy and sustainable transformation of the financial sector so that MSMEs in the project countries, especially in rural areas, are holistically strengthened. Access to a viable, sustainable financial market for the population and MSMEs in rural regions is to be improved and the sustainable use of demand-oriented financial services that contribute to social and ecological transformation strengthened. At the same time, the financial, entrepreneurial and ecological competences of MSMEs are to be improved. The target group on the supply side includes financial partner institutions that receive advisory services for demand-oriented and social-ecological optimization of business processes and financial services. On the demand side, the target group consists of stakeholders who offer and implement the programmes for entrepreneurial and financial education of MSMEs and the population and strengthen small entrepreneurs and the population in rural regions. 

Project Tasks

• On the supply side, national and central banks as well as commercial banks are supported in improving the regulatory framework and the implementation of international and national guidelines on sustainable financing (ESG). At the same time, work is being done with partner financial institutions to improve their range of demand-oriented financial services for MSMEs in rural regions.
• On the demand side, programmes are being established for entrepreneurial education of MSMEs in rural areas with content on resource-conserving business and risk-conscious management. 
• In Tajikistan, a programme is also being established for the financial education of the rural population, particularly to increase resilience to external influences.