The first micro-bank will appear on the Georgian financial market from 2022. The national bank of Georgia (NBG) has already finished working on the draft bill, which the central bank will submit to the parliament on the fall session.
According to the draft bill, micro-bank can be founded with a capital of 10 million and 70% of their loan portfolio must be business or agriculture loans. The loan limit ranges within 100 thousand - 1 million. On the one hand, micro-bank can issue loans in foreign currency and on the other, they can lend small and medium-sized businesses.
“The previous limit was set at 100,000 GEL, microfinance organizations were obliged to lend merely in GEL due to the legislation, which implies to issue loans up to 200,000 only in the national currency. The new bill is a step forward, which allows issuing loans in foreign currency as well. Part of MFOs has funding in the foreign currency and the difference, that a major part of the funding is in foreign currency, while 99% of assets are in the national currency creates foreign exchange risks, which was a big problem for us. I think that amended legislation will allow us to solve this problem”, - Gia Pertaia, General Director of microfinance organization MBC declares. As the general director of the MFO notes, after the bill comes into force, MBC will apply for a microbank license.
According to the draft bill, microfinance organizations will be able to receive deposits, open accounts and provide full service to the customers.
3 out of 39 microfinance companies are interested in obtaining a micro-bank license, including Crystal and Lazika Capital together with MBC.
A total of 39 microfinance organizations are registered in Georgia today. Their total assets are GEL 1.5 billion and their loan portfolio is GEL 1.25 billion.
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