Banks decrease interest rates

Georgia’s banking sector has managed to stand firm against world economic crisis but still has problems. The banks are not issuing so many loans now as they have too many bad debtors already.

At the beginning of February 2010 Georgian banks held a total of GEL 3.2 billion in assets, out of which GEL 2.1 billion is in the accounts of physical entities. These accounts accrue interest every month and this is worth around GEL 200 million. Bank assets are generally used to issue loans for individuals or businesses to generate more money, but recently the procedures of issuing loans have become more complicated as banks are afraid of losing money. Consequently banks have inevitably decided to decrease interest rates to balance their books, and some have already taken this unpopular step.