The National Bank Decides to Simplify Regulation of Lending to Individuals

The Financial Stability Committee of the National Bank of Georgia has decided to simplify the regulation of lending to individuals.

As the National Bank explains, mitigating the regulation means reducing the administrative burden for credit lenders, increasing risk management flexibility and reducing the number of income margins determined for loan service coefficient.

It is not yet known exactly how much the loan margin will be lowered. “It should be noted that the basic principle of regulation is unchanged and the lending organization should not impose a financial obligation on the debtor whose service is of considerable financial difficulty to the consumer”.

The provision on lending to individuals came into force on January 1, 2019. At present, loan servicing ratios are divided into four groups according to their monthly income: up to GEL 1000, GEL 1000 to 2000, GEL 2000 to 4000 and more than GEL 4000.

By Mariam Merabishvili