companies appropriated GEL 7 million
less borrowers’ property as payment of debts on loans.
At the same time, the
microfinance sector, based on the central bank’s new regulations as of October
1, created an additional loan-loss
reserves which amounted to GEL 108
Large companies account for about
half of the property appropriated in the
amount of GEL 7 million, but the exact distribution can’t be made due to the
lack of specifics in the reporting of Rico Credit, Georgia’s largest MFI.
Rico credit management says that it does not appropriate property in payment of debts – property of chronic
non-payers immediately is sold by the National Bureau of Enforcement and Rico Credit gets the value of the sold object but
doesn’t formally re-registers it.
The complex regulations
introduced by the National Bank for the financial sector, including MFIs and private
moneylenders, are constantly reducing the number of microfinance organizations.
regulations came into force on January 1, 2018.