"Remained on the market MFOs will manipulate interest rates as they wish"

access_time2020-02-18 14:17:09

In 2019 the number of microfinance organizations in Georgia decreased from 67 to 48 due to the strict regulations adopted by the National Bank while profits increased from GEL 1,101 to 1,129 million.

According to Beso ShengeliaChairman of the Board of the Microfinance Organizations Association, the closure of a large number of MFIs has not significantly changed the situation  in the market-  small companies went bankrupt, while large ones continued operating.

“Mainly MFIs that were engaged in online lending and pawn loans were forced to close,” he says.

In Shengelia’s words , in 2019 the situation stabilized, and companies that managed to adapt to new conditions operate as usual without having any significant financial problems. 


“As a result, MFIs lending began to grow. The crisis of 2018-2019 is unlikely to occur again in 2020, since the main difficulties are overcome, ” Beso Shengelia notes.

According to the head of the Association of Non-Bank Financial Institutions Givi Korinteli, this situation has a negative side such as a possible increase in interest on loans.

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