Baku, Azerbaijan, September 4
By Tamilla Mammadova – Trend:
About 98,260 loans with a floating interest rate were issued in Georgia as of August 1, 2019, Trend reports referring to the Georgian non-governmental organization Society and Banks.
As reported, the vast majority of the loans are related to the refinancing rate. Accordingly, borrowers increased the interest rate by 0.5 percentage points to 7 percent. As of August 1, 2019, loans in the amount of 5.04 million lari were issued with a floating interest rate.
The number of loans issued from July 1 to August 1 increased by 4,510, and the total portfolio increased from 4.7 million to 5 million. As of August 1, the weighted average interest rate on consumer loans issued in lari amounted to 14.14 percent.
The first place in terms of volume amounted to loans for real estate. As of August 1, about 35,370 loans in this sector were related to the refinancing rate. The total portfolio is 1,562.50 lari.
About 32,090 loans account for business financing. The total portfolio is 2.6 billion lari. Of these, 913.9 million lari was allocated to finance SMEs. As reported, 1.6 billion lari was allocated for the large business.
Loans tied to variable interest rates amounted to 39.63 percent of the total loan portfolio in lari, as of August 1. Most of them are business loans, and the lowest interest rates were on mortgages.
Compared to the same period last year, the variable interest rate loan portfolio increased by 2.29 million lari, and interest rates fell on average from 12.63 percent to 11.05 percent.
According to the Society and Banks, the refinancing rate should have increased. Although exports continued to grow (an increase of 12.4 percent in January-July) and remittances also increased (an increase of 7.8 percent in January-July), inflation still exceeds the target rate (annual inflation in August was 4.9 percent).
Consequently, monetary policy was tightened to reduce inflationary pressures.
(1 USD = 2.96 GEL on September 4)