The Republic of Georgia is a post-soviet developing country in the Caucasus, which has recently been making headlines in the Fintech industry due to all of the technological advancement in the country.
The small nation is definitely not rich to republic standards and is quite volatile when it comes to the local economy.
Desperate times call for desperate measures and the government has started to encourage a lot of local entrepreneurs to try their best and improve the financial situation in the country.
Some have announced social impact contests, which focus on just how much a new product can affect the people in need in the country and others just how easier it makes for the locals to lead stable financial lives.
The reason why banks are spearheading these actions is that they have the most capital available in the country compared to pretty much anything else. Some even joke that a bank’s marketing budget is larger than the capital city’s.
Generally, there are three fintech sectors that are popular in the country and these are payments, banking and the blockchain.
The blockchain has picked up even more recently after the country was put on the map for being one of the largest miners, even though it was thanks to only one company, Bitfury.
Regardless though numerous fintech startups have flared up in Georgia and are developing as we speak.
Let’s see some of the biggest innovations that have been implemented by large corporations or otherwise.
As already mentioned, the blockchain is extremely popular with the Georgian population, and not because they’re a leading nation in terms of production, but in terms of alternative income sources.
The income in Georgia is quite low in terms of European standards, the minimum wage is around 100 EUR, and the average salary stagnates between 300-400 EUR.
This is mostly due to the mass inflation the local currency has been going through lately. Nobody is sure why exactly the currency depreciated so much but, Georgian FX brokers are saying that it’s because of political and economic pressure from Russia.
Regardless of why it happened, the population is now trying to diversify into the blockchain, saying that it’s a much safer repository for their savings than the local currency, the Georgian Lari.
Because of such popularity, two large players on the local market have emerged. A crypto exchange by the name of MyCoins and a cloud mining company by the name of Birtvi.
Nearly every Georgian was on the crypto hype during 2017 and is now trying to re-invest it in things like real estate and etc.
The government is also very supportive of the blockchain, displaying just how much technology can achieve in terms of living standards for a country’s population when it is unopposed by the authorities.
Georgia managed to set an example, but it’s only now that global crypto brands like Cardano are visiting the nation.
Online banking & payments
Online banking is still relatively new in the country, but it has taken off to unimaginable proportions and several leading companies like TBC Bank and Bank of Georgia have implemented it to a point where it can rival some of the more sophisticated institutions in countries like Poland or the Czech Republic.
Online banking, when it first became available was absolutely revolutionary for the Georgian population because it was so engraved in society’s mind that the only way to make payments on things like utilities, phone balance, internet and etc was only available through pay boxes.
When the two banks mentioned above introduced online payments on all of these essentials it immediately became widespread to a point where innovation could be found around every corner.
The digital banking projects were inspired by the growing 90’s kids who were now starting to become a lot more tech literate than most of their parents and were demanding an easier method of banking in the country.
In the past, the banks were very focused on servicing the pensioners as much as possible, therefore they didn’t even consider something as complex as a digital banking platform.
Future developments in Georgia
As the country stands right now, it has a massive potential to develop its digital economy even further by attracting as many crypto companies as possible.
Georgia has a lot of potential for joining the European Union and therefore is a great destination for any company willing to find a cheap base of operations.
However, there is always a risk associated with the local market as Russian influence runs deep. Just now, by banning Russian airways from flying to Georgia, the Russian government managed to depreciate the Georgian lari, as it’s very responsive to the country’s tourism market and wine exports (of which most goes to Russia).
In order to somehow distance themselves from Russian influence, it’s essential that the Georgian fintech sector develops rapidly and opens up the gate for global markets.