The purpose of “Individual financing regulation” is to promote the stable and sustainable functioning of the financial system of Georgia and encourage lending process. Under this regulation, the lender is obliged to assess the solvency of the borrower and do not allow to issue a loan to individual or impose an obligation other than the individual has real ability to pay.
In the new version of the regulation, which came into force from April 15, the National Bank has softened the lending rules for solvent borrowers. More flexibility has been given to financial institutions to study consumer revenues themselves, especially in cases where the borrower does not have declared incomes at the Revenue Service or the bank. There is no longer an obligation of a financial organization representative to visit a self-employed person. The financial organization itself should find mechanisms to estimate the income of the self-employed.
According to regulation April 15th version there were several limits to the borrower’s income. It was up to 1000 GEL, then from 1000 to 2000 GEL, from 2000 to 4000 and above 4000. April 15, these limits were reduced to 2. This limit is stricter for the relatively low-income population and more flexible for the relatively high-income population. If the customer has an income of less than 1000 GEL, he can have a loan service ratio of 25% and pay a maximum of 250 GEL per month on the loan. And if the income is more than 1000 GEL, in this case the coefficient is 50%. If a person has an income of 2000 GEL, he can pay up to 1000 GEL on a loan, which is a very reasonable limit.