By the end of 2025, Georgian microfinance organizations (MFOs) held a total of GEL 1.34 billion in gold and other jewelry as collateral, according to financial reports submitted to the National Bank of Georgia. Pawnshop-backed loans have become the most profitable segment for MFOs, driving annual growth of 34% in this portfolio. Rising gold prices have further increased the value of collateral held by microfinance institutions.
Pawn loans now account for 78% of the total credit portfolio, making them the core activity of the sector. This trend highlights the central role of collateral-based lending in microfinance operations and revenue generation.
As of December 31, 2025, MFOs had issued 752,800 pawn loans, with an average loan size of 1,960 GEL. This represents a 27% increase compared to 1,545 GEL in the previous year, reflecting both growth in loan volume and the impact of rising gold prices.
The increase in average loan size is largely attributed to higher gold values, allowing borrowers to secure larger loans against the same items. This development underscores how market dynamics, such as precious metal prices, directly influence microfinance lending and household access to short-term credit.
