Home Economics 97 percent of the active population of Georgia has bank loans

97 percent of the active population of Georgia has bank loans


Georgia’s state foreign debt is currently 15,3 billion USD and this sum is to be paid from our pockets. If we add credits taken from banks and microfinance organization by the great majority of the population, it will be clear in what horrible social-economic situation most of the people are…

As time passes the Georgian population is getting more and more dependent on bank loans. If in developed countries people take credits to improve their welfare, in Georgia people take credits to cove monthly expenses.  Specialists refer to this process as alarming and say that rapid increase of the number of the loans is conditioned by a law economic growth. Business and economy news information portal Commersant.ge provides information about this issue.

According to the information of Sandro Gomiashvili – the executive director of Credit-Info, the number of credit records in the organization database is increasing annually. In January, 2016 there were 12 500 000 records in the database and by January, 2017 the number increased to 18 156 000. This means that during a year the number of credits issued by financial organizations was increased by 5 656 000. According to Gomiashvili’s statement, this is a record.

“Practically there has never been such increase in number of issued credits in previous years. In January 2016 compared to the same period of the preceding year the number of increase was about 4 million, in 2017 it increased by 5 655 000. It is true that some credits out of 18 million have already been covered but the increase is definitely great. Such increase is due to activation of online credit organizations and simplification of issuance of bank loans.” –Gomiashvili said.

At present there are records about 2 365 000 physical persons and 66 000 legal persons in the database of Credit-Info. This means that exactly the same number of people have some kind of credit liability. According to the recent census the number of the population of Georgia is 3 720 400. Consequently, about 63,5% of the population use credits. Considering the fact that actually none of the financial institution issues loans to people under 20 and people above 70 generally do not take loans, it is obvious that 97% of the active population has credit burden. According to the data of the Statistics Service, 2,438 million people between the age of 20-70 live in Georgia. In the opinion of experts, such increasing number of the issued loans is conditioned by worsening of general social-economic situation in the country. However this increase might be due to restructuration of loans by commercial structures.

The problem is that more than half of the issued 5,6 million loans might be designed for the current needs of the population and not the improvement of their welfare. It would be good if these loans were spent on mortgage and payment by installment, people would improve their living conditions, but it is not so. A great part of the loans are spent on payment of current expenses, satisfaction of everyday needs, payment of utility rates, etc. This is very bad. People take credits to finance current deficit caused by devaluation of GEL and due to the fact that economy is developing in a slow pace. 



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