Baku, Azerbaijan, September 23
By Tamilla Mammadova – Trend:
Since 2017, microfinance and online credit organizations of Georgia have been transferred to the management of the National Bank of Georgia, which resulted in this market segment shrinking, said the CEO of Vivus Company (leading company in payday loans and offers short term loans) Lasha Eredeli, Trend reports citing the commersant.ge.
The increase in charter capital, decrease in the ceiling on interest on loans to 50 percent, introduction of a responsible lending system, which significantly complicated the conditions for issuing consumer and mortgage loans - all these, and many other regulations, caused enormous damage to the non-bank credit market, leading to big losses for companies, and a reduction of their numbers.
At the end of 2017, 88 microfinance organizations operated in Georgia, and already at the beginning of 2019 their number dropped to 52. This, of course, led to job cuts - microfinance and online credit organizations are closing down, the rest are reducing the number of branches, and accordingly, the number employees.
Moreover, the process has not yet been completed - according to the National Bank of Georgia, another 13 microfinance companies are going bankrupt.
At the same time, profits are also decreasing - moreover, the second quarter of 2019 brought a loss of 30 million lari to the microcredit sector.
(1 USD = 2.97 GEL on September 23)