Papuna Lezhava, Vice President of the National Bank of Georgia (NBG) declares that draft bill on Micro Banks will be submitted to the Parliament of Georgia by fall. The draft bill provides setting new regulations for micro banks.
At least 50 million GEL of capital is required to obtain a commercial bank license, it is not yet known what will be the minimum amount of capital required for the establishment of a micro-bank.
“The goal of the reform is to increase competitiveness on the market and diversify products for the customers of the microfinance sector in order to grow their access to other types of financial products. The microbank is a small model of the universal bank focused on business lending. Micro-banks will be able to attract GEL resources, including through the National Bank's monetary policy instruments. They will also have the right to attract deposits, as well as to manage correspondent and customer accounts. It is expected that regulation on micro-banks will be stricter compared to the microfinance organizations, especially in terms of corporate governance and operational risks, but much easier compared to the commercial banks. We are going to work on legislative changes during the summer and we plan to submit draft bill to the parliament by the autumn sessions," said the Vice President of NBG.
Microfinance organizations are the main target for obtaining micro-bank licenses. The NBG expects that some of MFOs will change their legal status and become a micro-bank.
A total of 39 microfinance organizations are registered in Georgia today. Their total assets are 1.5 billion GEL and their loan portfolio amounts to 1.25 billion GEL.
