Page 44 - GEORptOct21

8.1.2 Loans
Georgian loans to rise by 7.5% in 2021, predicts NBG
ADB approves $200mn policy-based loan for Georgia
The 15 commercial banks operating in Georgia have a portfolio of GEL39bn (some $11bn) of loans, meaning that GEL3.27bn are NPOs. The banks set aside provisions in excess of GEL10bn in March last year.
The NBG forecast that the volume of loans in Georgia would increase by 7.5% this year, compared to a 7.7% y/y growth rate calculated as of March.
The Asian Development Bank (ADB) on October 29 approved a $200mn policy-based loan to help restore parts of Georgia's economy impacted by the coronavirus (COVID-19) crisis by addressing challenges in the country's public finance management and social security systems.
The Fiscal Sustainability and Social Security Assistance Program is part of ADB's comprehensive and integrated assistance package to address damage caused by the pandemic to healthcare, social protection and the economy in Georgia.
"The steps taken by this program are critically important to mitigate the economic impact of Covid-19 and maintain macroeconomic stability over the medium to long term and also to protect the lives of the people most affected by the crisis," said ADB representative Rogerio de Almeida Vieira de Sa. "The program will help older citizens who are particularly vulnerable to the consequences of Covid-19."
In May this year, the ADB approved a $100mn loan to support the government’s anti-crisis measures, including tax deferments for small and medium sized businesses, temporary payments for pandemic-affected workers, and free access to COVID-19 diagnostic and treatment services.
The government of Georgia has passed changes in a credit guarantee scheme to provide more state guarantees on loans in the most productive sectors. The budget of the programme will be Georgian lari (GEL) 300mn ($100mn) instead of the initially announced GEL20mn.
The credit guarantees are valid for no more than 10 years after the loan is issued or restructured.
Furthermore, along with the banks, microfinance organisations will be involved in the programme, for which an additional GEL30mn ($10mn) will be allocated, economy minister Natia Turnava said. The programme will be administered by the Ministry of Economy under the name "Produce in Georgia".
The government decree also stipulates that in order for a company to be eligible to participate in the credit guarantee system, its revenue should not exceed a certain threshold and its existing loan liabilities should not exceed GEL12mn. Within the framework of the programme, the beneficiary is entitled to use several loans.
The minimum loan amount issued by the commercial bank to the beneficiary under the programme will be GEL50,000, while the minimum loan amount issued by the microfinance organisation will be GEL20, 000, and the maximum volume of financing guaranteed per company is GEL5mn.
A total of 203 areas of activity in which funding can be allocated has been defined.
44 GEORGIA Country Report October 2021 www.intellinews.com