A new category of banking institutions is expected to join 15 commercial banks starting next year, - according to the draft law on "Micro-Banks" prepared by the National Bank of Georgia (NBG).
According to the draft bill, a micro-bank can be founded with a capital of 10 million and 70% of their loan portfolio must be business or agriculture loans. The loan limit ranges within 100 thousand - 1 million. On the one hand, micro-bank can issue loans in foreign currency and on the other, they can lend small and medium-sized businesses.
Tamar Kusikashvili, Head of Legal Drafting and EU Law Division at National Bank of Georgia explains that a micro-bank is an intermediate institution between a commercial bank and a microfinance organization.
"The new financial institution will have the right to conduct banking activities, but not with a full load, as commercial banks do today. The niche that we think these financial institutions will seize, is the lending of agriculture and entrepreneurs. We think that financial involvement in the regions will also increase. We have high expectations for this project", said Tamar Kusikashvili.
The first micro-bank will appear on the Georgian financial market from 2022.
