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Microfinance sector at profit of 45 million in 2020

By Natalia Kochiashvili
Wednesday, February 10
40 microfinance organizations operating in Georgia have already submitted the financial results of 2020 to the National Bank of Georgia (NBG). As Business Media informed, the total financial report of the sector shows that the size of their assets increased by 7.1% last year and currently stands at 1.47 billion.

Despite difficulties, the total profit of micro financial organisations in 2020 was GEL44.8 million, which is much more than the 0.1 million profit in 2019, although the main reason for the weak profit in 2019 was the write-off of unpaid loans of millions of Lari by online lenders; and in 2020, these players left the market altogether. Among them, the liquidation process began in “Vivus”, one of the largest online lenders.

According to the NBG, the number of micro financial organisations has decreased by 8 in 2020, and a total of 27 have left the market in the last 2 years.

Financial indicators demonstrate that microfinance organisations have issued loans totaling GEL1.18 billion, which is GEL55 million more than the results of the previous year. The interest income on these loans last year was GEL281 million. As for distribution, the most important loans for microfinance are pawn shop loans, which account for 43% of their loan portfolio - GEL519 million, increase of GEL87 million compared to the previous year.

The main credit directions for microfinance organisations are distributed as follows: Consumer loans - GEL 265 million portfolio, decrease of 4.1 million; Trade and services - GEL199 million portfolio, decrease of 11 million; Agriculture - GEL99 million portfolio, decrease of 4 million; Installment - GEL 48 million portfolio, increase of 12 million; Loans to legal entities - GEL41 million portfolio, an increase of 6.3 million; Online loans - GEL1.8 million portfolio, decrease of 28 million.

As for non-interest income, microfinance organisations received GEL51 million in various fees, including currency conversion fees.

The most important source of financing for microfinance organisations is loans from international financial organizations, amounting to 328 million. At the same time, micro financial organisations have received GEL283 million in credit financing from the Bank of Georgia. Last year, their debts increased by GEL118 million.

According to the information submitted to the NBG, the sector employs a total of 4.1 thousand people. In 2018, the figure stood at 4.4 thousand.