The National Bank of Georgia (NBG) is preparing changes that would ease access to bank financing for real estate developers and gradually replace internal installment schemes with mortgage loans. The regulator is consulting with banks and business associations to update lending rules for the construction and development sector.
According to the NBG, the new framework will require adequate equity participation from developers while opening more opportunities for mortgage-based sales. The bank argues that shifting from internal installments to mortgages will strengthen consumer protection and support the sector’s sustainable development.
Currently, many developers rely heavily on internal installments because strict capital requirements limit their ability to obtain bank financing. In addition, when buyers use mortgages, banks often hold the loaned amount until 60% of the project costs are absorbed, restricting developers’ cash flow. Under the proposed changes, developers with at least 30% equity and 60% project spending could gain access to mortgage funds sooner.
Business Association Director Levan Vepkhvadze and Banking Association President Aleksandre Dzneladze both describe the reforms as a significant step that will simplify credit access for developers, reduce risks concentrated in internal installment schemes, and encourage wider use of mortgages.
