In Georgia, tens of MFIs and online loan organizations might be closed

In the near future, tens of microfinance institutions and online organizations might be closed due to the new regulation that limits their activities. The regulation aims at restricting online loan services. There were 41 online loans and approximately 71 microfinance organizations registered in Georgia’s Creditinfo database. In the near future those credit organizations which are not currently active in the market will not be able to compete under the new regulations and will be left with no other option than to close.

The new regulation including interest rate decreases, make it nearly impossible for the organizations to cover the costs incurred for doing business. Some organizations are working to reduce costs by reducing staff and liquidating some of their locations. It is expected that larger, strong companies will survive the new business climate while smaller ones will shut their doors.

Source: commersant.ge