National Bank of Georgia (NBG) has allocated 450 million GEL for about 70 microfinance organizations as part of Larization program. The financial component is to be shared to MFO’s due to the amount of loans issued by them.
“In transient period, for the purpose of preventing financial resources from growing in value, commercial banks are obliged to supply preliminarily determined amount of liquidity received from Larization support instrument to microfinance organizations.
A certain limit has been determined for each microfinance organization due to the amount of loan portfolio. Commercial banks will receive 1/12 portion of the mentioned limit from NBG every month under USD-denominated mortgage and the commercial banks will lend these resources to microfinance organizations”, NBG reported in February 2017.
Despite NBG-allocated funds, a part of microfinance organizations assert that they have not received pledged funds from NBG.
Besik Shengelia, head of Lazika Capital microfinance organization, says that NBG pledged to supply GEL resources in January. The transaction was postponed for February and then for May. Shengelia asserts that his company has not received the resource from NBG and the company has to draw resources from commercial banks. Therefore, GEL resources for MFOs has risen in value by 2%.
“You know that restrictions were imposed on commercial banks too and therefore, they actively work on the restricted segment, I mean GEL-denominated loans of about 100 000 GEL. This signifies that they are our direct competitors and we became dependent on our competitors.
Commercial banks were able not to supply GEL to us or supply at speculative prices. NBG analyzed these threats and realized that this would not be valuable competition and they promised to instruct commercial banks not to increase GEL resource in value. NBG also determined to supply GEL resources to commercial banks, with which we had multi-year cooperation. However, these steps were to be taken in January, then in February and now we are waiting for the end of May”, Shengelia noted.