GDG Group : If the internal installment  system is not introduced, it will cause serious damage to the business and increase the number of unfinished projects”

GDG Group : If the internal installment system is not introduced, it will cause serious damage to the business and increase the number of unfinished projects”

access_time2019-06-11 09:00:53

Development companies complain about a decline in sales due to tightened  lending  regulations that have complicated  the procedure for issuing mortgage loans. For this reason, developers are considering  the introduction of  an internal installment system.

According to Bezhan Tsakadze, GDG Group founder, his company is focused on wealthy buyers who do not use a mortgage, but other companies should introduce an internal installment system.

 “The advantage of this system is that it is not  regulated by the central bank. The regulator cannot interfere in a deal between the two parties, ”he explains.

In Bezhan Tsakadze’s words,  the internal installment provides mechanisms to protect real estate companies from the risks associated with non-payment by customers - if the client cannot pay the amount, the apartment will be sold, and a former owner will receive part of the amount paid by him.

“In a difficult period, when banks cannot issue mortgage loans, developers are forced to act as a financial institution , otherwise sales may fall to a record low,” GDG founder notes.


According to Tsakadze, the internal installment system has other risks associated with the lack of necessary amounts by the developers - there is always the danger that the company will go bankrupt, and buyers who have paid for the unbuilt apartments in advance will be left without housing.

“The government  must once and for all adopt regulations requiring either money or bank guarantees to obtain a building permit, ” Bezhan Tsakadze explains.

The businessman believes the restriction on obtaining a mortgage loan in a bank should not mean an automatic ban on internal  installments.

“The Parliament and the National Bank are set to equate the internal installment plan to a bank loan. If this norm is adopted, many development companies will go bankrupt, ” Tsakadze  points out.

In his opinion, the very idea of introducing strict regulations on mortgage lending was wrong, since property buyers are usually rational and responsible people who can fulfill their financial obligations.

“If developers are still banned from introducing the internal installment  system, it will cause serious damage to the business and increase the number of unfinished projects,” Bezhan Tsakadze concludes.


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