With backing from the USAID Economic Governance Program, the Georgian Financial Market Treasury Association (GFMTA) is spearheading a money market study. This research will identify the needs of companies, paving the way for the development of a relevant toolkit for joining international organizations, thereby enhancing Georgia's visibility on the global investment map.
The USAID grant focuses on two principal directions - the institutional development of the association and funding for educational activities. Thanks to USAID's financial support, GFMTA offers a variety of low-cost or free training programs for financial market participants.
Specifically, GFMTA has slated a series of educational programs and hands-on training on derivatives and hedging tools for corporations (also known as the 'buy side') for the upcoming fall season. In addition, certified trainers from ACI and the International Capital Markets Association will offer training to professionals who are at the forefront of trading, particularly those involved in risk management and back-office operations.
Tornike Revishvili, the chief specialist of the Financial Markets Department at the National Bank of Georgia, emphasizes that hedging tools are multifaceted and their application requires an understanding of the financial, economic, and legal dimensions, as well as the inherent risks. Misuse of these tools can be more detrimental to a company than the problems they were employed to solve.
For this reason, the educational activities will be led by experts with a blend of practical and theoretical knowledge from mature financial markets.
According to Lasha Jugeli, the executive secretary of GFMTA, there is a general deficiency of education in specific sectors of financial markets. The association is currently working on filling this gap, providing targeted training for foreign exchange markets, among other sectors. Furthermore, the association conducts general educational trainings, with USAID also participating in these activities.
USAID dedicates significant efforts towards tackling issues in capital markets, which are inherently complex. Giorgi Amzashvili, USAID's adviser on capital market issues under the economic management program, notes that a crucial component is the supply side, represented by companies that have to produce a marketable product that investors desire. Amzashvili identifies education as a key challenge in Georgia, with many Georgian companies lacking a well-structured treasury department.
While some companies have made progress in this regard and have successfully issued corporate bonds, more work is required. The emergence of skilled treasury specialists will be crucial, making the role of the association incredibly important for USAID.
The Georgian Financial Markets Treasuries Association, founded on November 21, 2019, by the National Bank, commercial banks, and microfinance organizations (MISO), received a $220,000 grant from the USAID Economic Development Program to support the development of educational, organizational, and research areas. Currently, the association has 15 members, including the Pension Agency, the National Bank (founding member), 3 MISO, and several commercial banks. Swiss experts, Bruno Langritz and Marcel Zimmerman, are currently drafting the association's medium-term action plan.