Georgia's central bank leveraging new tool to support SME financing
The NBG said that with the gradual restoration of economic activity it became important to take additional measures in order to avoid future liquidity risks. Photo: Nino Alavidze/Agenda.ge.
Tweet 
Share
Starting June 1 the National Bank of Georgia (NBG) will launch a new tool for liquidity management to support the financing of small and medium-sized businesses in Georgia, announces the NBG.
This tool consists of two components: the first is for commercial banks, which will have the opportunity to receive liquidity support from the NBG in exchange for mortgaging the loan portfolio, while the second component is for micro-financing organisations, which will be able to attract loan resources from commercial banks with the support of the NBG within the loan portfolio that is in accordance with the criteria established by the NBG.
The new mechanism will ensure liquidity risk reduction and uninterrupted supply of financial resources to creditworthy borrowers.This will help the economy recover quickly and return to the pre-crisis trajectory of the country's economic growth", says the NBG.
The NBG said that with the gradual restoration of economic activity it became important to take additional measures in order to avoid future liquidity risks.
"Banks in Georgia are particularly wary of lending to small and medium-sized businesses as there is increased uncertainty and risk on the market. In this situation, in order to maintain credit and, consequently, business activity, a number of tax benefits and state guarantee tools will be put in place.
“The NBG will ensure that this process is conducted smoothly in order to support the liquidity of the financial system, as it is the function of central banks to maintain a sufficient level of liquidity in the market in order to continue the business lending process. One of the ways to achieve this is to provide liquidity in exchange for mortgaging non-liquid assets", says the NBG.
What support can business expect?
The government of Georgia has presented an anti-crisis plan for Georgian businesses in order to ease the burden caused by the coronavirus crisis. The government responded to the demand of the hotels, restaurants, tourist agencies and tour operators in Georgia and decided to postpone payment of property and income tax by four months.
The Georgian government will identify people who need help as a result of having lost jobs amid the state of emergency in Georgia. The government will determine who has lost the job in this period through the decreased amount of people who pay income taxes, said Vice Prime Minister Maia Tskitishvili earlier today.
In order to reduce the negative effects caused by the coronavirus pandemic and strengthen the Georgian economy, the National Bank of Georgia has developed a temporary supervisory plan, which is in full compliance with the recommendations of the International Monetary Fund, European Central Bank and other leading financial authorities, announces the NBG.
Georgian Prime Minister Giorgi Gakharia stated that the government will help people who have lost their jobs due to the state of emergency announced to prevent the spread of the coronavirus in the country.
Currency exchange booths will reopen on June 8, reports local media outlet Netgazeti, citing member of the association of currency exchange booths Vakhtang Grigalashvili.
In order to provide more transparency, increase competition and liquidity in the foreign exchange market the National Bank of Georgia is carrying out a reform that will come into force in October 1, 2020.
In order to ensure financial stability the National Bank of Georgia (NBG) is taking actions to promote the development of new technologies and innovative approaches in the financial sector.
A strong customer authentication rule and a new regulation on card-based instruments that will contribute to reducing fraud and secure the rights of customers will come into force this month, announces the National Bank of Georgia (NBG).
The International Monetary Fund has praised the measures adopted by the National Bank of Georgia (NBG) in the past two years aiming to strengthen the non-banking sector’s financial regulation, supervision and oversight in Georgia.