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Georgia’s net interest rate spread hits 15 percent

Business Materials 22 May 2012 11:25 (UTC +04:00)

Georgia, Tbilisi, May 22 / Trend N.Kirtzkhalia /

According to the World Bank and the World Economic Forum, net interest rate spread in Georgia is 15 percent.

The net interest rate spread, which is the difference between the weighted average interest rates on loans and deposits, is one of the most important indicators of the degree of competition.

The Association of Young Financiers and Businessmen of Georgia said that, according to official statistics of the National Bank of Georgia, net interest rate spread is 10 percent, but in any case, it's a large figure, and on this indicator, Georgia occupies one of the last places in the world.

The Association emphasized that in the global competitiveness index Georgia ranks 129th among 142 countries in the world. The organisation said that the commercial banks of Georgia in 2011 received from loans a profit of 1.2 billion lari ($ 1 = 1.63 lari), and the maintenance of deposits cost them 391 million lari.

"Georgia observes one of the biggest differences between the interest rates on loans and deposits both in the region and the world. Only a few countries have higher net interest spread rate than our country. It Tajikistan - 18 percent, Paraguay - 24.8 percent, Malawi - 21 percent, Madagascar - 38.8 percent, Kyrgyzstan - 27.4 percent, Haiti - 16.2 percent, Congo - 39.7 percent, and Brazil - 31.1 percent," the association said.

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