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Pawnshops will Be Banned to Take Vehicles and Real Estate as Loan Guarantees

Pawnshops will be banned to take vehicles and real estate in exchange for loans, Minister of Finance Mamuka Bakhtadze said. Pawnshops represent one of the key sources of excessive indebtedness in Georgia.

‘Moreover, there are cases when pawnshops provoke crimes. Therefore, new rules will be applied to pawnshops too. We have started consultations and we back the idea of banning pawnshop to accept vehicles and real estate as loan guarantees”, Bakhtadze noted.

Arguments of opponents as if this decision will restrict access to startup capital is not acceptable, he said.

“Dear fiends, can you name any successful business project started with pawn loans”, Bakhtadze asked.

Absence of regulations in this sector provokes unhealthy relations between citizens and pawnshops, especially in terms of putting vehicles and real estate in exchange for pawn loans, he added.

“Therefore, it is my personal position that pawnshops should be banned to take vehicles and real estate as loan guarantees. Their operation should be strictly regulated and they should not have access to the so-called registered property”, Bakhtadze said.

I would like that these regulations come into force in May 2018, he added.