Pension-backed loan interest limit decreasing across Georgia starting today
Social Service Agency and Liberty Bank - the entities facilitating pension-backed loans - were adjusting the upper limit of the rates at 25.8 percent, a significant decrease from previous rates. Photo: Nino Alavidze/Agenda.ge
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The upper limit for interest rates on pension-backed loan payments is decreasing across Georgia following a campaign by the Citizens political party.
The party revealed on Tuesday the Social Service Agency and Liberty Bank - the entities facilitating pension-backed loans - were adjusting the upper limit of the rates at 25.8 percent, a significant decrease from previous rates.
In its announcement, the party said the change meant the Bank would no longer be issuing loans at the previously used “punishing” limits of “43 or 36 percent” to its pension-age customers.
The party’s campaign was followed by the Prime Minister’s decree on establishing an interdepartmental commission tasked with studying the pensions system, identifying gaps and analysing the data, the announcement also said.
The commission’s work resulted in the development of new conditions for the upper interest rate limits, and led to the approval of the rates that will not “further worsen [material] conditions of pensioners”, the release added.
Commercial banks in Georgia loaned ₾43.65 billion ($16.17bln) and received deposits of ₾42.62 billion ($15.79bln) in November 2022, the latest data from the National Bank of Georgia shows.
Commercial banks in Georgia loaned ₾43.24 billion ($15.87bln) and received deposits of ₾42.31 billion ($15.53bln) in October 2022, the latest data from the National Bank of Georgia shows.
The Interagency Commission for Determining the Terms of Banking Services has ruled on establishing a 26 percent upper limit for loan payments backed by pensions, which may be further reduced in the future based on inflation in Georgia.
Georgian Health Minister Zurab Azarashvili on Monday announced the conclusion of a state tender aimed at improving loan terms for pensioners in the country, revealing “significantly improved conditions” for the senior citizens would follow the move.
Georgian Deputy Finance Minister Mikheil Dundua on Wednesday announced interest rates on pension-backed loans would see annual reduction, in comments on Government initiatives for pensioners and socially vulnerable citizens.
The Pension Agency of Georgia has estimated the net asset value of the country’s pension fund at ₾2.97 billion ($1.1 bln).
New transparency requirements will come into play for financial organisations operating in Georgia starting April 1 in a bid to better protect the rights of consumers, the National Bank announced on Friday.
The Pension Agency of Georgia on Friday said pension assets in its fund were worth ₾3.66 billion ($1.42bln), while net assets amounted to ₾631 million ($245mln).
Natia Turnava, the Acting President of the National Bank of Georgia, on Wednesday met the members of the Investment Council of the country's Pension Agency to review revisions in the legislation on cumulative pension and investment plans.