Online Non-Bank Credit Association appeals Gov’t to mediate with National Bank

A non-profit banking association in Georgia is asking to get involved with negotiations regarding regulating the issuance of online loans.

Today the Online Non-Bank Credit Association of Georgia, uniting 10 key online loan issuing companies, asked the Government of Georgia to be involved in negotiations between the Government and the National Bank of Georgia (NBG).

The statement released today said the organisation had "accepted” the Government and National Bank's joint decision to regulate the issue of online loans.

We appeal to the Government to mediate with the National Bank to accelerate the process of granting the status of micro-finance organisations to companies issuing online loans,” the statement read. 

The Association said it was in the companies' best interests to operate under the regulations of the NBG and offer their clients financial products that meet high international standards. 

Georgia’s Prime Minister Giorgi Kvirikashvili yesterday said the Government and NBG were working on a package of amendments that would ban issuing online loans, as it was a "public demand”. 

Georgia’s Minister of Finance Dimitri Kumsishvili elaborated on the announcement and said the ban would concern a certain business model, referring to online credit companies who offered loans with very high interest rates. 

He said this type of business model did not ensure the protection of consumers rights and it also did not create vital preconditions for companies that issued the loans to gain their money back.