TBC Meets with Customers to Clarify Loan Larization Program

George Shagidze, Financial and Deputy Director of TBC Bank, answered questions about the loan larization program during a meeting with the bank’s clients at the TBC head office on Monday.

As the detailed explanation of the government’s and the National Bank of Georgia’s joint loan larization initiative was given, the following topics were discussed: which borrowers the program applies to, risk factors for fixed or variable interest rate loans, and risks related to the exchange rate changes.

The program applies to loans under 100,000 Lari that were made in USD.

Various local and global factors affecting the lari and dollar exchange rate changes were highlighted during the presentation, while a detailed insight into the nature of refinance rates and how they are formed and used by the National Bank of Georgia as an instrument to control inflation was discussed. It was noted that it is difficult to predict and set the refinance rates in advance.

George Shagidze explained the difference between two types of loans in Lari and US Dollars and went on to talk about the scenarios and prognoses for the future with regards to possible refinance rate changes. “Our goal is to give the maximum amount of information to our customers so that they have answers to all their questions about the loan larization program, which will help them make an informed decision,” said the TBC Financial Director.

When asked about the benefits of the loan conversion, he said that the larization program makes it possible to reduce risk. "If someone has an income in Lari, switching to this program will potentially more or less prevent them from risks related to the exchange rate and refinance changes.’’ said Shagidze.

by Nino Gugunishvili