Archil Bakuradze, Chairman of Supervisory Board of Crystal declares that no deterioration in asset quality is observed in microfinance company Crystal. However, the financial expenditures of the microfinance organization itself have increased due to the growth of refinancing rate by the National Bank.
As of Q1, 2021, the total volume of loans in the microfinance sector is 1.25 billion GEL. Crystal is the leader by the lending, which has a loan portfolio of 342 million GEL. In addition, the microfinance sector had a total profit of 23 million GEL, while Crystal's direct profit amounted to 3.67 million GEL. Bakuradze told "Business Morning", that the increased financial expenses will have a negative impact on the financial results of the second and third quarters.
“I think 2021 started well. The most interesting thing is that the quality of assets is not deteriorated. The reason why loans are not deteriorating in our sector is that almost all loans are issued in national currency, and most of the arrears are due to loans in USD and EUR. We do not have this problem. But our resources increased in price in 2Q due to the growth of refinancing rate. As a result, our financial resources got expensive. We issue loans on small entrepreneurs, but we find it difficult to issue large volume of loans. In this segment, we cannot compete with the banks. The most problematic for us is the refinancing rate, which directly affects the structure of our expenditures, so the second and third quarters will not be as profitable as the first quarter,” said Archil Bakuradze.
According to the statistics, microfinance organizations issued loans of 1.25 billion GEL on the Georgian economy. The volume of total loans is 681,000, correspondingly the average loan totals to 1,831 GEL.
Loans By Categories:
•Pawnshop loan - a portfolio of 568 million GEL, 485,000 loans; interest income in Q1 was 14.5 million GEL;
•Consumer loans - a portfolio of 267 million GEL, 53,700 loans; interest income in Q1 was 32.9 million GEL;
•Loans issued on trade and service sector - a portfolio of 203.4 million GEL, 36,500 loans; interest income in Q1 - 11.5 million GEL;
•Loans issued on agricultural sector – a portfolio of 106.8 million GEL, 21,400 loans; interest income in Q1 - 5.9 million GEL;
•Installment – a portfolio of 49.2 million GEL, 81,900 loans; interest income in Q1 1.5 million GEL;
•Other categories of loans - a portfolio of GEL 9.7 million, 833 loans; interest income in Q1 0.9 million GEL;
•Loans issued on legal entities – a portfolio of 42.4 million GEL; interest income in Q1 2.1 million GEL.
In total, microfinance organizations received an interest income of 75.4 million GEL in the first quarter. The volume of non-interest income was 8.7 million GEL.
Microfinance organizations employ 4,100 persons, the sector has issued salaries of a total of 21.6 million GEL in Q1.
