The National Bank of Georgia (NBG) says that simplifying lending in the real estate sector aims primarily to reduce risks associated with in-house installment plans. According to David Utiashvili, head of the Financial Stability Department at NBG, the changes will give developers with nearly completed projects greater access to bank financing, reducing the need for in-house credit and increasing buyer protection.
“If a developer has completed roughly 60% of a project, the bank can provide a mortgage using the unfinished property as collateral. This makes mortgage loans more accessible for buyers and ensures they are safer than under in-house financing. The funds go directly to the developer to complete construction,” Utiashvili explained. He added that it is healthier for the financial system and economy when loans are issued through regulated institutions, where consumer rights are fully protected.
The NBG emphasizes that these new rules strengthen responsible lending standards in the real estate sector. By encouraging mortgages over in-house installment plans, the reform aims to increase transparency, reduce risks, and improve protection for property buyers.
