Property appropriated by MFOs as payment of debts on loans decreased by GEL 7 mln

Property appropriated by MFOs as payment of debts on loans decreased by GEL 7 mln

access_time2021-01-18 14:00:46

Georgian microfinance 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 million.

 

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.

 

The regulations came into force on January 1, 2018.

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