Congratulations, Your Loan Approved” – commercial banks send similar messages to Georgian citizens every day, sometimes twice a day.
Many and many financial organizations offer various tempting proposals to shove their loans. The bank sector specialists assert this is an ordinary business and it is inadmissible to restrict advertising bank products or offering loans to the population. The fact is Georgian citizens damaged by usurers and commercial banks resort to permanent rallies. Some of them threatens with committing suicide and asks the Authorities for assistance.
This situation with our citizens, who receive the mentioned messages, could be compared to these words: “Pardon, Death Knocking on Your Door!” It is worth noting this type of consumer loans charge a high interest rate of 36% because of high risks. Frequently, borrowers become insolvent in several months. As a result, commercial banks resort to blackmails and pressure and seize their property. Finally, commercial banks return their loans, but Georgian citizens get further impoverished.
Mariam Tolordava’s family has already suffered from this bank product. Tolordava used to reside in a four-room apartment of the Czech project. Her unemployed husband took the so-called easy loan, spent the money in a betting house and lost the sum. The family knew nothing about this. After a certain period, the bank warnings and requests led Mariam to depression. She had to visit a psychologist and buy expensive medicines. Finally, the family learnt her husband had taken another loan to serve the previous credit. The unemployed person could not pay the loan, naturally. The heavy situation led the family to selling a big house and they bought a small one. They also bought a cheap vehicle by the remaining money so as the husband could work as a taxi driver.
“This loan beckons like a drug. My husband was repenting his conduct but we have recently found he has taken a new credit from one of the finance organizations. As a result, he could not pay interest rates and he had to sell the new vehicle too. Tomorrow he may even sell this house. It is surprising these organizations issue credits to unemployed persons. Similar approaches may ruin the whole country. The Authorities should, first of all, tackle this issue. It is inadmissible that finance organizations, including commercial banks, make a fortune at the expense of socially vulnerable citizens. We hire the Authorities to be protected from similar threats and this is a genuine ordeal”,
Mariam Tolordava noted.
Giorgi Tsutskiridze, a representative of the Association of Banks, says commercial banks compel nobody to take loans and clients should determine themselves whether the loan terms are acceptable.
“When our citizens receive loan proposals from commercial banks or finance organizations, this is a usual process. This signifies this is an ordinary form of making an offer. Credit offers are sent to the clients, who have opened salary accounts in specific banks, or to the potential clients. Loans are approved if the client agrees on the terms. This process does not proceed in automatic regime. Before the loan approval, commercial banks explore whether the client is solvent. If the client is insolvent, naturally, commercial banks will not approve the loan. This signifies no one is forced to take loans. I just reaffirm this is an ordinary offer”
Giorgi Tsutskiridze said.
The bank sector expert Vazha Kapanadze says insolvent citizens should not take loans, while the financial activity is an ordinary business in the form of selling financial products. This is an ordinary product like goods and products in stores and supermarkets. People should decide themselves whether they need this credit. People without incomes should not take loans or they should take consultations from competent individuals, Vazha Kapanadze said.
However, in the country with the sharpest unemployment problems and 1.5 million socially venerable citizens the so-called easy credits may become a new headache for the government.
Naturally, people make decisions themselves to take a loan or not, but there is much temptation in this respect like drugs and gambling games.
The relations between a commercial bank and a client are regulated by the law. The parties sign a bilateral agreement and both parties get obliged to fulfill the agreement terms. However, it should be also noted agreements basically describe the rights of commercial bank, while the rights of clients are indicated in a minimized form. The low culture of healthy relations with commercial banks is an additional major problem in Georgia.
Our citizens take loans without exploring the agreement with a commercial bank. Anyway, even if a client reads the agreements, the terms are very complicated and less understanding. Consumers are unaware of their rights in relation to commercial banks and of how to get rid of the expected problems. By the way, several years ago the Authorities proposed to set up a Bank Ombudsman’s office, but this issue was forgotten and the client remains before the finance sector.