The FINANCIAL -- Alliance Group Holding (AGH) plans to position itself as a strong financial and consulting company on a regional level. Geographical location together with human capital is believed to be the core competitive advantages of Georgia on a global level. Given the increased competition between developed and developing countries, it is recommendable for Georgia to build up its agro and energy sectors to ensure its economic future.
“Development of the agro sector is crucial for Georgia. It will allow us to supply local demand under the huge increasing deficit and volatility of prices on a global level. Together with energy independence, it will ensure the future of our developed economy. The cooperation of society with the Government is important in this direction,” Aieti Kukava, CEO at Alliance Group Holding, told The FINANCIAL.
According to Kukava, AGH is a company of global ambitions. “Our goal is to be positioned as a strong consulting and financial group in the region in 5-7 years’ time. Our current strategy is to attract more income from abroad rather than from local services. We believe that economic and political processes domestically will be in a better way and will promote the pace of our growth,” he said.
Alliance Group Holding was established as an investment and consulting company in 2005. The Holding incorporates: Alliance Group Leasing; Alliance Group Capital; Alliance Group Microfinance; the National Credit Information Bureau; Alliance Energy; Alliance Group Property; Alliance Group IT.
“Bringing value to the country’s economy has always been the main goal of the company. This approach is unique; rarely do companies use it as their mission. We have always realised that bringing long-term value to the economy is directly linked to the company’s future solid prospects. We have managed to make significant progressive impact on all of the seven industries which are incorporated under our holding.”
When the team of AGH started business in Georgia in 2002, its goal was to develop strategic industries that were key to the country’s development. The members had experience of the consulting and financial industries. Accordingly, they chose other fields: business information; credit bureau; real estate database; microfinance, leasing and investment. The energy sector was later added to these sectors.
“There were two main reasons that encouraged us to develop these fields. These industries were of strategic importance to the country. They would contribute important benefits to Georgia and our society. The development of the credit bureau has significantly raised the efficiency of banking and the financial system. Risk optimization contributed to considerable enhancement of crediting the economy. Therefore, the already competitive banking and financial system of the country made a big step forward in increasing the competitiveness of the region,” said Kukava.
Offering those financial and investment services that are outside of the banking sector was the next stage of AGH. The company started developing microfinance, leasing and investment services.
As Kukava explained, classic micro financial companies that are mostly focused on financing micro and small enterprises bring lots of benefits to the country’s economy. Such organizations are successfully helping entrepreneurs that then start using banking and other services at later stages.
Leasing is the most optimal source for financing equipment, according to Kukava. As he said, it is an attractive alternative to financing for entrepreneurs in both financial and taxation terms.
Later on, AGH started offering its investment and consulting service. This incorporates assisting entrepreneurs to attract capital and long-term resources, as well as attracting strategic partners or just purchasing businesses back.
The Holding is developing the business information sector. The company is producing a database of active Georgian companies. All of this simplifies and increases the attraction of potential foreign partners to Georgian companies.
The Holding considers energy to be a core industry of our country. “That was the main motivator for why we decided to become involved in this sector. The development of renewable energy resources will increase export income by direct trade with generated energy. It will also increase the supply of cheap energy resources for the local economy. Finally, the production of local export production will significantly increase.”
As the CEO of AGH explained, the company’s mission is about creating values for all stake and shareholders by developing the country’s strategic fields. “AGH has contributed to the country’s economy by developing the above-mentioned seven fields. However, we are not going to stop at that.”
“Georgia is a country of huge opportunities,” believes Kukava. He distinguished its geographical location and natural resources as well as prosperous human resources as the core advantages of the country.
“The geographical location allows the country to be a trade hub not only in terms of maritime and land but also from an aerial view,” Kukava said.
“An abundance of renewable energy can be used for developing the economy. It will allow Georgia to meet the future with more confidence when oil and other energy resources will be getting exhausted in the world,” he explained.
Kukava believes that human resources are the most important thing the country has. “Through proper development and optimal usage of this resource, Georgia can compete and enrich all high skilled fields with innovations in a 5-15 year period.”
“The ongoing political processes and tension are pushing investors to invest in traditionally less risky regions, like the US and Europe. Currently developed and developing countries are in fierce competition over attracting capital. Therefore, Georgia is facing quite a difficult task,” said Kukava.
“Georgia should use all of its potential and properly promote itself. The country should create stimulating packages to attract strategic investors with,” Kukava told The FINANCIAL.