Some Microfinance Organizations to Write-Off Debts of Socially Vulnerable

Twelve microfinance organizations, who are participating in the governmental initiative of annulling debts of 600,000  black-listed Georgians, have stated they will write off the debts of socially vulnerable people.

As stated by Georgian Prime Minister Mamuka Bakhtadze in mid-November, the total amount of such debts, amounting to 1.6 billion GEL, would be covered by the Cartu Foundation, which is a fund owned by ruling Georgian Dream (GD) founder and chair, billionaire Bidzina Ivanishvili.

Cartu Foundation and commercial institutions had negotiations and reached an agreement whereby Cartu will take responsibility for the loans of black-listed people in banks whose loans do not exceed GEL 2000. Of the total 600,000 people, 150,000 are socially vulnerable. However, the mentioned micro-finance organizations agree to annul the debts of the socially vulnerable people without compensation.

The Chairman of the Association of Microfinance Organizations Beso Shengelia stated that at this stage only 12 microfinance organizations share this initiative, but their number may increase.

“We already have consent from the Ministry of Finance that some legislative initiatives will be prepared, as a result of which when banks write off the loans of the socially vulnerable people, they will not pay the tax,” Shengelia added.

The process of annulling people’s debts will take place from December 15 to December 31.

By Thea Morrison

Related stories:

More Financial Organizations Get Involved in Debt Annulment Initiative

National Bank Head Praises Gov’t Initiative of Annulling People's Debts

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