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
Shengelia, Chairman 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.