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“I hope that the National Bank will revise these regulations if necessary. It’s a bit early to assess the effects of these regulations, but its effect on the construction sector, for example, is easy to see,” he said, adding the regulations should be softened as much as possible.
Last week, Georgia’s Minister of Economy and Sustainable Development Giorgi Kobulia expressed a different view: he said that the government is not going to soften the banking regulations, according to which banks are not allowed to give their clients loans without studying their solvency.
"These regulations are adequate and serve to protect the people from taking loans without realizing the possible consequences,” he stated.
The new banking regulations took effect in Georgia on January 1, 2019 meaning that people will not get loans from banks if there are no solid guarantees that they will be able to pay it back on time.
8.1.5 SMEs finance
EIF and ProCredit double support for innovative companies
The European Investment Fund (EIF) and Germany’s ProCredit Group are providing an additional €800mn to innovative small and medium-sized companies (SMEs), bringing the total funding to €1.62bn for companies in eleven countries, the European Commission said on July 15.
The financing will be available through ProCredit banks in Albania, Bosnia and Herzegovina, Bulgaria, Georgia, Germany, Greece, Moldova, North Macedonia, Romania, Serbia and Ukraine.
“This continued and increased level of support from the EU will make a tangible difference to thousands of people with innovative business ideas in need of a financing, adding to the 2,000 SMEs that have already benefited from this scheme.” European Commission's Vice-President Jyrki Katainen, responsible for jobs, growth, investment and competitiveness said in the statement.
Agreements with ProCredit Group have already supported around 2,000 innovative SMEs, mainly in the manufacturing as well as in the wholesale and retail trade sectors.
These agreements were signed under the European Commission's InnovFin initiative, backed by the EU's research and innovation programme Horizon 2020.
The InnovFin initiative enables participating banks to provide loans to innovative companies with the support of a guarantee provided by the EIF. EIF is part of the European Investment Bank and its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them access finance.
8.1.6 Bank news
ADB extends loan to Georgia to spur mortgage lending in rural areas
Georgian lender Credo Bank and the Asian Development Bank (ADB) on April 17 announced t hat they have signed a GEL60mn (€20mn) loan agreement aimed at helping the local bank extend long-term financing in local currency to support low-income customers in home purchase,
35 GEORGIA Country Report August 2019 www.intellinews.com