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MFOs not to Issue Credit Cards

Georgian  microfinance organizations disclaim intention to start issuing credit cards, and will continue to focus on business lending.

According to the head of the MFO “Georgian Credit” George Naskidashvili, the organization is at a stage of development at which consumer lending  is not  a leading product and gives way to business lending.
“Today,  business and agro lending are basic direction on which we focus. Therefore, we are opening offices in the regions and offer our clients various types of agro loans and installments. Although, in general, if the demand for consumer loans increases, we will not abandon it, “- he notes.

The MFO “Crystal” also refuses to  issue credit cards. The MFO CEO Malkhaz Dzadzua says that in the near future this issue will  not be considered, although the study of this trend will continue.

“We are now studying how attractive this product may be for consumers, but don’t plan to take any concrete steps at this stage,” – he adds.

According to him, in the long run  credit cards can be bind  to other services  to make their services cheaper than those offered by  banks.

“Research has shown that credit cards issued by  MFOs are  2 times more expensive than offered by banks, so in order to make them competitive, we need to bind  them to other services. Then the interest rate will be in the range of 24-36% per year, “- Malkhaz Dzadzua points out.

The company “Invest Georgia”  temporarily abandons the idea of issuing credit cards, however, according to Director George Gvalia, this issue has not been solved yet – at this stage the company is studying the credit card market.