Dollarization of loans has increased again

GBC offers the full statement of the National Bank of Georgia:"We would like to respond to the misinformation spread in various media outlets that it is planned to restrict the activities of payment systems - VISA and MASTERCARD in Georgia.First of all, we would like to clarify that this is disinformation and an attempt to misinterpret real facts, which do not correspond to reality.One of the functions of the National Bank of Georgia is to promote the safe, sustainable and effective functioning of the payment system.To fulfill this function, the National Bank constantly cares for the development of the country's payment system, improving its accessibility, efficiency, security, as well as creating a competitive environment in this regard. In particular, the National Bank itself develops the payment infrastructure, prepares proposals for legislative amendments, and also cooperates with the world's leading technology companies, including international card systems Visa and Mastercard.The above-mentioned companies have been represented in Georgia for more than 25 years and have made a great contribution to the development of the country's payment sector, which was one of the main drivers of the growth of non-cash payments in Georgia. Within the framework of cooperation with Visa and Mastercard, new products are periodically introduced, including cross-border transfer tools.However, the development of financial technologies has allowed the world's leading traditional payment systems to improve their efficiency, in particular, a new generation system has been created - the instant payment system, which has already been introduced in more than 120 countries. These systems work without the use of cards and have the ability to offer the end user a payment method similar to card payments, in certain cases with more advantages, such as the cost of implementing the operation and immediate availability of funds to the transfer recipient.Several years ago, the National Bank, together with the World Bank, began working on a project to introduce an instant payment system. This system will be available to our population and business representatives from the second half of 2026. Moreover, this system will further develop the so-called "Open Banking" services, which are offered in Georgia by fintech companies registered by the National Bank with the status of payment service providers. It should be noted that the establishment of the Institute of Non-Bank Payment Service Providers and the promotion of "Open Banking" services are one of the requirements of Georgia's Association Agreement with the European Union, which was fully implemented with legislative amendments implemented in 2022. The synergy of instant payments and open banking services will allow consumers and private entities to receive services tailored to their needs and affordable. It should be noted that despite the fairly high level of development of card payments in Georgia, this payment method is still not widely available to small entrepreneurs due to the high commission for its service. "The instant payment system, in collaboration with fintech companies, will increase the availability of electronic payments in a sector that currently lacks this service.It should also be noted that the new payment system will operate on the basis of international standards and is compatible with the Single Euro Payments Area (SEPA) schemes, which will allow us to integrate our country's payment system with the European payment system after Georgia's accession to the SEPA geographical area.We would like to clarify that the above-mentioned non-card and traditional card (VISA, Master Card, American Express) payment schemes operate in Georgia, as well as in leading countries of the world, and will continue to operate in parallel with each other, which will create more competition in the payment sector and provide a wide choice of services for consumers", - NBG's statement reads.

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The volume of car loans in bank deposits, after a 6-month decline (September-January), increased in February to 295 million GEL (+ 10% m.m). This is added to the car pawnshop, 135 million.According to BRG, car lending was at its peak at the end of August, with investments of 342 million GEL.The fall-winter drop in financing in commercial banks is explained by external factors, including increased demand from Central Asia, which increased the share of re-exports. Interest rates have risen mainly due to the tightening of foreign currency loans, under the influence of 3 rounds of increases in the limit on foreign currency lending (since January, the limit has been increased to 500,000).Car loans are issued for a term of up to 6 years. Secondary, at an annual rate of 17-18%. The annual rate of a loan for the purchase of a passenger car is determined from 12-13%.The borrower's co-financing is within 20-30%. At the same time, the LTV is not reduced. As you know, the loan-to-value ratio for loans secured by real estate has been reduced to 10% in GEL, and to 20% in foreign currency from 30% for non-residents.As reported by TBC and the Bank of Georgia, only cars brought to the site (including those without clearance) are financed. No purchases are made on credit at auctions.The rate and term are determined taking into account the customer's income and the condition of the car. By the date of disbursement of the car loan, the car must not be manufactured before 2019. Older cars are allowed for auto leasing.Banks mainly issue transport loans through subsidiary leasing companies, the rate is within 28%-44%. Commercial banks mainly issue car installment loans. Banks with large assets operate in this segment.Indexed loan (linked to foreign exchange LIBOR, linked to the GEL variable refinancing rate). It may increase in price several times before the end of the term. According to the loan terms, in GEL, when the rate increases by 5 percentage pont, the effective rate is equal to 23%. In dollars, when the effective rate changes by 3 percentage pont, the effective rate increases from 17% to 21%, and in Euro - from 16.2% to 19.4%.The adjustment of the rate under foreign exchange loans is determined by the increase or decrease in global rates (according to the expectations of the European Central Bank and the Fed's rate and its fluctuations).

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According to Geostat, in 2024, Georgia imported a total of $92.8 million worth of bakery and confectionery products.TOP-5 countries by importing bakery products in 2024: Russia - $25.75 million Turkey - $16.75 million Ukraine - $12.52 million Bulgaria - $6.84 million Poland - $6.2 million As for bakery product exports, in the first quarter of 2025, a total of $962 thousand worth of products left Georgia, which is $471.8 thousand less than the same period last year ($1.43 million). Exports of this product decreased by 32.8% during the reporting period.In 2024, Georgia exported $6.34 million worth of bakery products.TOP- 5 countries exporting bakery products in 2024: Armenia - $2.88 million Azerbaijan - $2.41 million Uzbekistan - $250 thousand Turkey - $202 thousand Israel - $200 thousand

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Compared to 2023, in 2024, the share of first-order births in total live births decreased from 37.7 percent to 35.9 percent. The share of the second child remained almost unchanged and equaled 33.7, while the share of the third and next order births increased from 27.5 percent to 29.0 percent.Compared to 2023, in 2024 the share of live births for women aged 25-39 remained almost unchanged (69.5 percent) and decreased for women aged less than 25 (from 24.6 percent to 23.2 percent), while increasing for women aged 40 years and older (from 6.0 percent to 7.3 percent).The mean age of mothers at first birth in 2024 equaled 27.0 years.In 2024, the number of deaths increased by 2.8 percent in annual terms and totaled 43,971 persons. The largest number of deaths was recorded in Tbilisi (12,492) while the smallest – in Racha-Lechkhumi and Kvemo Svaneti Region (533).According to the 2024 data, infant mortality rate (per 1,000 live births) equaled 7.4 ‰. The under-5 mortality rate (per 1,000 live births) in 2024 totaled 8.6‰.According to the 2024 data, the negative natural increase was stated in Georgia (the difference between the number of live births and the number of deaths) equaling -4,488. A negative natural increase was registered in all regions except Tbilisi, Adjara A.R. and Kvemo Kartli region.

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However, at this time last year, digital banks ("Hash", "Pave Georgia") were still in testing mode. Also, as of 01.03.2025, 2 microbanks of the sector, former MFOs MBC and Crystal, were added.The consolidated figure still includes the sanctioned VTB, which loss exceeds 28 million in January-February .The share of 2 systemic banks (BOGG, TBC) in profitable banks is 87%.

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According to the agency, a Georgian wine marketing campaign is planned for this year, organized by Colangelo Partners with financial support from the National Wine Agency. The campaign focuses on increasing demand and sales in the U.S. market through strategic initiatives. In addition to ongoing activities, consumer-focused events will be enhanced to further popularize Georgian wine and engage American consumers.As part of the campaign, tasting seminars will be held in various U.S. cities for wine professionals and trade representatives. Georgian wine will also be showcased at international exhibitions, supported by targeted advertising and media campaigns. Additionally, wine tours to Georgia will be organized for media, sommeliers, and sales representatives to deepen their understanding and promote Georgian wine in the U.S. market.Colangelo Partners has been promoting Georgian wine in the U.S. since 2022 under a contract with the National Wine Agency. During this period, Georgian wine exports have shown steady growth. In 2024, exports reached 1.2 million litres—an increase of 32% compared to 2023.The U.S. remains one of the most lucrative markets for Georgian wine, with an average price of approximately six dollars per litre, reflecting its high quality and growing demand.

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According to Geostat, in 2024, a total of $20.2 million worth of pasta was imported into Georgia.TOP-3 Pasta Importing Countries in 2024: Russia - $9.71 million Italy - $3.63 million Turkey - $1.9 million As for pasta exports, in 2024, a total of $321 thousand worth of pasta was exported from Georgia, the main part of which ($183,660) was supplied to the Iraqi market.

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The resolution, supported by 101 members with 10 against, expresses deep concern over democratic backsliding and weakening human rights in the country. It highlights growing societal polarization and the adoption of legislation that contradicts Council of Europe standards.“Over the past two years has had an increasingly negative impact on local democracy in Georgia. This has intensified in the aftermath of the 2024 parliamentary elections, which were rejected by all opposition parties, as well as domestic and some international election observers, notably due to concerns over their integrity, and following the decision to halt Georgian EU accession on 28 November 2024,” the resolution reads.It also notes that “following the highly controversial adoption of the Law on Transparency of Foreign Influence and the Foreign Agents Registration Act (FARA) adopted in first reading, NGOs and dissenting voices in the media, which work under increasingly challenging conditions, have been increasingly subjected to intimidation and stigmatisation. This undermines their freedom of association and freedom of expression. In a democratic society, freedom of expression must be protected, supported and promoted irrespective of whether it is critical of the government, and even if it is influenced by international discourse.The brutal repression of peaceful protesters and opponents by law-enforcement authorities in many cities, and particularly in the capital city of Tbilisi, has violated both the freedoms of expression and assembly. Moreover, freedom of assembly in Georgia has been negatively affected by recent amendments to legislation that increase sanctions and offences related to public demonstrations, which according to the Venice Commission introduced “vague and broadly framed provisions, granting the authorities [including local authorities] excessively broad discretion in their application”. This situation has forced local authorities to take decisions that do not comply with democratic standards.The instrumentalisation of public institutions, including at local level, has resulted in numerous reports of dismissals, intimidation and pressure on civil servants. This has been facilitated by the adoption of amendments to the Law on Public Service.”It also addresses concerns expressed in recent reports by international and local observers “regarding the politicisation of public administration, widespread misuse of administrative resources and pressure on voters during electoral campaigns, which unduly tilt the playing field between candidates and distort the will of voters.”“The legal framework applicable to local elections in Georgia has been amended more than 20 times since the last elections, without extensive consultations and broad consensus. This is not in line with the principle of stability of electoral law. The amendments have moreover reinforced the dominant position of the ruling party in the Central Election Commission, undermining its independence, and have also wound back fundamental rules pertaining to the electoral system, gender quotas and the establishment of electoral districts.It notes with concern that these serious shortcomings and challenges affecting the respect of democracy, rule of law and human rights have led to a collapse in public confidence in democratic institutions for large parts of the Georgian population, and notably the young people, and damaged local democracy, which is not conducive to holding the 2025 local elections in a trust-based environment; in fact, it risks exacerbating the situation,” the document reads.

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