The National Bank of Georgia has announced a phased increase in the income thresholds subject to its 25% loan-service-to-income (PTI) limit. According to the NBG, the change aims to maintain responsible lending amid higher wages and economic growth and protect lower-income borrowers from over-indebtedness.
Under the new rules, the threshold will rise from the current GEL 1,500 to GEL 2,000 from February 1, 2027, and to GEL 2,500 from September 1, 2027. NBG Financial Stability Department Head David Utiashvili said the changes were driven by growth in average wages.
The Microfinance Organizations Association says the changes will have a significant impact on the sector, particularly companies focused on traditional and business lending. Association head Nino Devdariani said their target customers generally have lower incomes, meaning many could fall under the new restrictions.
“The demand will not disappear. It will simply move to another segment - faster, pawnshop-type lending,” Devdariani said on Business Morning. Similar lending regulations were first introduced in 2018, when a 25% limit applied to incomes of up to GEL 1,000; the threshold was raised to GEL 1,500 in 2022.
