"My main duty is to take measures, sometimes harsh and unpopular ones, in order to reduce the risks despite the influences of interests from different groups", said President of National Bank of Georgia (NBG), Koba Gvenetadze when assessing the new regulations during the plenary session at the Parliament of Georgia.
“I understand that new regulations would not have a positive effect in such a short term. Many businesses which are currently facing some difficultulies are the ones who based its entire businessmodel on loan products, which were issued without checking whether citizens were able to pay it or not.
However, we have to look at a bigger picture at the same time and observe the results with such crediting system. Taking into account the experience of other countries, we can say for sure that in a few years majority of Georgian population, as well as the economy of our country would have suffered from severe consequences of indebtedness. Unemployment would have increased drastically. The main role of National Bank of Georgia, as well as the government or the Parliament is to take measures before such radical aggravation of the situation in order to prevent many potential problems”, stated Gvenetadze regarding the regulations that entered into force since January 1.
NBG President also stated that Georgian banking system is among one of the most successful ones in the region, which is because of the principle oversighting of the National Bank.
“National Bank of Georgia is an independent, apolitical organization, the work of which, including the oversight, is assessed by many international prestigious organizations and this assessments are always the best and examplory for developed countries as well.
Because of uncompromised bank oversight from NBG, investors have high trust for Georgian Banks which are traded on international stock markets”, stated President of National Bank.
Gvenetadze has reviewed the situation before these changes and stated that there were very harsh circumstances in terms of unhealthy crediting system.
“Fast development of technology and a ‘predator’-type of aggressive and irresponsible lending by different companies or financial institutions has resulted in very harsh conditions for a big part of our population. 700 000 citizens turned out to be unable to pay. Moreover, there are hundreds of thousands of citizens who have inadequately high loans compared to their income. We are receiving many letters from citizens regarding the facts that they have lost their real estate or that they are on edge of losing it because of decisions, they hadn’t realized well.”
According to Gvenetadze in future the responsible crediting system will increase the lending in business sector and small and medium enterprises (SMEs).
