The regulations set by the National Bank of Georgia happened to be severe for microfinancing organizations.
The number of organizations significantly dropped, but it did not affect the sector's profitability.
As Chairman of the Supervisory Board of Microfinance Organizations Archil Bakuradze says, despite the difficulties, the sector can cope with the crisis.
He says the maintained competitiveness in the sector also links with the regulations.
"The regulations led to two changes: the rule for granting loans has been improved, and lending conditions have been stiffened,'' adding that the so-called problematic loan number has decreased.
"Consequently, the sector has become more resilient to shocks,'' he said.
The standard has increased considerably, and the capital amount also increased.
"It is essential to continue the development of the surveillance system. Over the past two months, the National Bank and the Government of Georgia have held many events. In particular, a liquidity mechanism was created that facilitated our access to relatively cheap capital. Besides, together with the Ministry of Economics, we are working on the inclusion of a credit guarantee scheme and other activities that will help the sector to run smoothly, "Archil Bakuradze said in an interview report.ge.
In 2019 the number of microfinancing organizations in Georgia decreased by 19, and the sector encountered severe problems as the upper-interest rate barrier was introduced.
Маri Chitaia
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