“A limit set on the maximum interest rate ceiling decreased  investment attractiveness of MFOs and online lenders”

“A limit set on the maximum interest rate ceiling decreased investment attractiveness of MFOs and online lenders”

access_time2019-09-12 13:43:42

In the second quarter of 2019, foreign direct investment (FDI) in the financial sector decreased by $ 93 million.

According to President of the Association of Banks of Georgia Alexander Dzneladze, a decline in capital flows was  mainly observed in the non-banking sector. In his opinion, the introduction of lending regulations, namely the limit set on the maximum interest rate ceiling decreases the investment attractiveness of MFOs and online credit companies.

The  National Bank of Georgia (NBG) reports that microfinance organizations operating in the country closed the half year with a net loss of  GEL 80 million.

MFOs’  assets amounted to  GEL 1.3 billion which is 200 million less than in the same period in 2018.

Apart from that, in one year  their number decreased by 19 as well as  a volume of assets of the microfinance sector.


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