Annulment of Debts of 600,000 Citizens to Start December 15

From December 15, 2018, the Government of Georgia is to annul the debts of over 600,000 citizens, of which 150,000 are socially vulnerable.

The information was released by the Prime Minister of Georgia, Mamuka Bakhtadze, who said on November 19 that the names of 600,000 citizens, whose loans at banks do not exceed GEL 2000 ($748), will be removed from the register of debtors, allowing them to meet the New Year without debts.

“Almost 95% of the debts on the black list consist of loans with a principle sum not exceeding 2000 GEL. We are talking about the financial responsibility of more than 600,000 citizens to banks, online organizations, or a variety of other financial institutions. The total amount of their debts amounts about GEL 1.5 billion ($561,23m). Today's decision annuls this 1.5 billion GEL debt,” Bakhtadze said.

Ivane Machavariani, Georgia’s Finance Minister, says that Cartu Foundation, established by the Founder and Chair of the ruling Georgian Dream, Bidzina Ivanishvili, will take the full responsibility of paying the debts of those 600,000 people on the black list.

“This step could not have been taken without the help of Cartu Foundation, which expressed full support to solving this problem. Negotiations with banks and other financial institutions have already been held regarding the current issue of excessive debts,” said Machavariani.

“The elimination of excessive debt is a precondition for defeating poverty. Today's decision will allow hundreds of thousands of our fellow citizens to get involved in the economic and social life of the country, which will make our economy more sustainable and the banking sector healthier,” Bakhtadze explained at the special press-conference on Monday.

The move comes as the Georgian government promises to work more on reducing debt pressure in the country.

By Thea Morrison