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Microfinance Institutions not to Increase Interest Rates

Microfinance Institutions not to Increase Interest Rates

Some microfinance institutions operating in Georgia exclude the possibility of rising interest rates due to the devaluation of the national currency.

In particular, George Naskidashvili, Director of MFO “Georgian Credit”, says that the growth of interest on loans is not planned, in addition, the devaluation of the lari increased demand for loans in local currency. “People think about currency risk and became to prefer loans in GEL, respectively, the demand for loans in dollars fell. At this stage we do not plan to increase interest, besides there is not much demand for debt restructuring, “- he notes.

The MFO “Microcredit” claims that the demand for restructuring has increased markedly. According to Director David Nadareishvili, during 2015 the demand for extension of the repayment schedule of loans has increased by 30%. “This is primarily due to the devaluation of the lari, respectively, customers ask to reduce the size of monthly payments. With regard to interest rates, we do not plan to increase them , especially when an interest on loans in the national currency account for 34%, while in the US dollars – 24%, “- he adds. At present, up to 70 microfinance institutions are working on the Georgian market.