Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697751533014.pdf (Georgia)
Interagency Forum: Access to Finance for Agricultural Cooperatives Tbilisi, Georgia November 29, 2016 1 Results from the Annual Cooperative Survey: Access to Finance Interagency Forum on Access to Finance for Agricultural Cooperatives Irakli (Rati) Kochlamazashvili Tbilisi, Georgia November 29, 2016 2 “In any intellectual inquiry, at least half the job consists in asking the right question; similarly, in the process of social and economic change, an obstacle clearly visualized is an obstacle half overcome.” Albert Hirschman The Strategy of Economic Development (1958) 3 ENPARD Supported Cooperatives Across Georgia (247 cooperatives) Source: ENPARD supported cooperative database, ECU & ENPARD consortia (October, 2016) 4 Access to credit/funding is the number one constraint for Georgian cooperatives 50 45 40 35 30 25 20 15 10 5 0 Access to credit/ Access to capital Natural disasters (land, machinery, etc.)
(including insurance) finances Access to Markets (including infrastructure) Access to Inputs (irrigation, Government regulations Access to skilled employees Access to information Other machinery, seeds, (taxes, business fertilizers) regulations, food safety) 2015 2014 A ranking of factors inhibiting the development of ag coops, based on self- assessment by 82 coops in 2014 and 118 coops in 2015 Source: Annual Cooperative Survey data of ENPARD supported cooperatives, ENPARD consortia (July, 2016) ENPARD is a major source of funding for Georgian ag coops • ENPARD supports a total of 247 Agricultural Cooperatives; • GEL 11’265’800 was invested by ENPARD, leveraging an additional GEL 3’651’909 of co-financing by the coops (Total: GEL 14’917’710) • On average, each ENPARD-supported coop invested about GEL 60,000 (75% of which was financed by ENPARD) 32 60 33 45 77 4,500,000 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 Care PIN MC Oxfam UNDP Grant Amount (GEL) Co-financing by Cooperative (GEL) Source: ENPARD supported cooperative database, ECU & ENPARD consortia (October, 2016) 6 Another important funding source for coops is Preferential Loans by APMA • 39 preferential loans issued since 2014 Currency # of Cooperatives Total Value Per Cooperative Total 39 GEL 3.86 mln GEL 99 K Sub-sectors of agriculture Fruits and Vegetables Livestock - pig breeding Greenhouse production Beekeeping Fishery Storage Milk processing Mix farm Slaughterhouse Fruit processing Hazelnut processing Viticulture Cereals Source: APMA (November, 2016) 7 0 And there is also ACDA funding!
• About 6 mln GEL for coops operating in specific value chains, such as beekeeping, dairy, etc.

Source: ACDA (October, 2016) 8 Still, funding is considered the number one constraint!

50 45 40 35 30 25 20 15 10 5 0 Access to credit/ Access to capital Natural disasters (land, machinery, etc.)
(including insurance) finances Access to Markets (including infrastructure) Access to Inputs (irrigation, Government regulations Access to skilled employees Access to information Other machinery, seeds, (taxes, business fertilizers) regulations, food safety) 2015 2014 A ranking of factors inhibiting the development of ag coops, based on self- assessment by 82 coops in 2014 and 118 coops in 2015 Source: Annual Cooperative Survey data of ENPARD supported cooperatives, ENPARD consortia (July, 2016) One way to learn how coops can overcome the financing bottleneck is to look at successful cases • Out of 118 surveyed ENPARD cooperatives, 48 managed to invest additional money in 2015 (beyond ENPARD’s grants); In total, additional investment comprised 1’369’390 GEL • Number of Cooperatives <<< >>> Thousand GEL Source: Annual Cooperative Survey data of ENPARD supported cooperatives, ENPARD consortia (July, 2016) 10 Note that additional investment by coops is on the rise!
2014 vs. 2015 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 18 207,600 2014 60 45 30 15 0 48 1,369,390 2015 11,533 GEL (on average) 28,529 GEL (on average) Total Amount (GEL) # of Coops with Additional Financial Support Source: Annual Cooperative Survey data of ENPARD supported cooperatives, ENPARD consortia (July, 2016) 11 We conclude with questions: • What explains the success of some coops to raise additional capital?
(leadership, certain skills, size of assets, specifics of the value chain, etc.)

• What can we learn from the failure of other coops to raise capital?

• How can we (government, donors, value chain partners, and the farmers themselves) make coops bankable?

12 Thank you!

Eric Livny (eric.livny@iset.ge) Nino Kakulia (n.kakulia@iset.ge) Daviti Zhorzholiani (d.zhorzholiani@iset.ge) Irakli Kochlamazashvili (i.kochlamazashvili@iset.ge) Acknowledgement 13