Planned regulatory changes could encourage new players to enter Georgia’s microbanking sector by simplifying licensing requirements and expanding lending opportunities, according to Nino Devdariani, Chairperson of the Microfinance Association.
Speaking on the TV program Business Course, Devdariani said one of the main barriers to entering the sector was the requirement that at least 70% of a microbank’s loan portfolio consist of business loans. Under the proposed amendments, this threshold will be reduced to 50%, making it easier for existing microfinance institutions to obtain microbank status.
The reforms will also increase the maximum lending limit per borrower or related group from GEL 1 million to GEL 2 million and allow microbanks to issue foreign-currency loans.
Devdariani noted that pawn loans account for around 80% of the microfinance sector’s portfolio, making the previous business-lending requirement difficult for many institutions to meet. She expects the relaxed rules to facilitate market entry and attract new microbanks.
