09.Dec .2020 16:15

Non-Inclusion in the Loan Subsidy Program Does Not Pose a High Risk of Spoiling the Microfinance Organizations’ Portfolio – Gvenetadze

Non-Inclusion in the Loan Subsidy Program Does Not Pose a High Risk of Spoiling the Microfinance Organizations’ Portfolio – Gvenetadze
views 224
Back

According to the President of the NBG, the non-inclusion of microfinance organizations in state loan subsidy programs for businesses does not pose risks to their portfolios. Koba Gvenetadze stated about it at the online press conference held after the MPC session in response to BM.GE's question.

Question: Hotels, restaurants, event companies, etc. are part of the government's anti-crisis package. It is possible to subsidize the loan interest from the budget, but this is only in the case of bank loans and this does not apply to microfinance organizations. Do you as a regulator have any recommendations for the government? How big is the risk of spoiling the portfolio of microfinance organizations without a support package?
 
The President of the National Bank does not see much risk in this regard. In his opinion, the involvement of banks in the subsidy program is more important.
 
"Since the share of loans in dollars in microfinance organizations is very low and GEL loans are issued; Also, since we started regulating microfinance organizations in 2018, no risks have been accumulated here and at this stage, the sector is coping very well with these challenges. Therefore, we think it is more important to subsidize bank loans.
 
We are constantly cooperating on these issues. Financial stability is not just a function of the national bank it is the task of the government as a whole.
 
"The risk of spoiling the portfolio of the microfinance organizations in this direction is not big," Gvenetadze said.