Purpose – to analyse the digitalization trends in the Central Caucasian (Georgia, Azerbaijan and Armenia) and Baltic States with the aim of reducing a financial gap for the Small and Medium size Enterprises in Georgia, Azerbaijan and Armenia.
Research methodology – comparative analysis between Baltic and Caucasian countries are made to analyse the basic positions and farther development opportunities for Georgia, Azerbaijan and Armenia.
Findings of the given paper – while SME sector crucially important contributor to employment, diversification and productivity in any country of the world and especially in developing ones, they still face significant credit constraints through traditional credit providing institutions. However, the trend is changing and modern digital technologies from the fintech area are providing new alternatives, which already had been widely used in Baltic, but still are waiting their chance in Georgia, Azerbaijan and Armenia, with different level of progress and readiness.
Research limitations – some statistical data does not exist for all six countries or were possible to obtain for different periods of time. Lack of academic literature on fintech in Caucasian countries.
Practical implications – It can provide a useful perspective for researchers, academics, investors, investment managers, decision-makers, and scientists.
Originality/Value – The paper analyses three advanced European Union member state’s (Lithuania, Latvia and Estonia) fintech positions and perspectives as a model of development for three developing Caucasian states (Georgia, Azerbaijan and Armenia).
Using Georgia as an example, this article analyses the fintech ecosystem and the impact of fintech companies on traditional financial institutions. Both qualitative and qualitative research has been carried out for this research. Based on the analysis of Georgian and international financial markets, as well as the qualitative and regressive analysis used in the study, assumptions were made about the impact of fintech companies on traditional financial institutions. Moreover, the study identifies the challenges that hinder the development of the fintech ecosystem in Georgia regarding infrastructure, finance, regulation, and education. This article also reveals several aspects that positively affect the outcome of fintech and the diversification of the Georgian financial market. At the end of the article, the relevant conclusions and applicable recommendations are given.
This study analyses China’s One Belt, One Road (OBOR) initiative for the Baltic and South Caucasus countries. Trade, Foreign Direct Investments and transit potential are taken as main factors for the cooperation. A clash of China and the West in pursuing economic leadership is taken into account. The study suggests a new, alternative route for the OBOR initiative through the Caucasus, which has all the needed infrastructure and readiness for being started. Moreover, Georgia is not new to the EU preferences, it has experience of GSP+ and now the unique achievement of free trade regimes with the EU and China is also taken as an alternative route and an advantage for the Caucasus and the Baltic States.
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