BAKU, Azerbaijan, Feb.1
By Tamilla Mammadova – Trend:
Of the total loan portfolio of Georgia's financial system, 12 2 percent are consumer loans - 4.7 billion, Trend reports via the National Bank of Georgia (NBG).
During 2020, consumer lending increased by 15 percent and 652 million lari ($198 million), and 87.7 percent of these loans are denominated in the national currency - the country's regulations prohibit the issuance of loans for less than 200,000 lari ($60,741) in foreign currency.
Considering that the overwhelming majority of consumer loans are significantly less than 200,000 lari, it is clear why this sector accounts for such a significant share in lari.
Some 96 percent of consumer loans in Georgia are long-term, 4 percent are short-term.
Consumer loans are mainly aimed at household purchases, and they are also taken by citizens with low incomes, respectively, they contain a high level of risk.
Therefore, consumer loans in national currency are distinguished by very high-interest rates - an average of 17.3 percent per year. This indicator in short-term loans is even higher - 23-26 percent per year.
Given that interest rates in foreign currency are several times lower - 6.5 percent and 7.9 percent, respectively.
A year ago, interest on consumer loans was below 16.8 percent - 18.4 percent.
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