BAKU, Azerbaijan, Feb. 11
By Maryana Akhmedova – Trend:
Georgia’s banking specialists expect the tightening of interest rates on mortgages and consumer loans in the first quarter of 2022, Trend reports via the Credit Conditions Survey conducted by the National Bank of Georgia (NBG).
According to the survey, a slight decrease in demand for business loans in the current quarter is expected, while a change in demand for loans to individuals is not foreseen.
Business borrowers do not expect significant changes in lending, interest and non-interest terms are not expected either. Although the tightening of interest-free lending conditions for foreign currency mortgages is predicted.
“The representatives of the banking sector expect to tighten interest-free lending conditions for foreign currency mortgages in the first quarter of 2022. This will be largely due to regulatory changes,” the research said.
According to the representatives of the banking sector, a slight tightening of interest rates on mortgages and consumer loans issued in the national currency in the next quarter is expected, the NBG said.
Bankers expect tightening of interest-free lending conditions for mortgages amid regulatory changes. In particular, in order to dollarize the portfolio of mortgage loans and reduce the risks arising from it, from January 2022, the term of mortgage loans in foreign currency was reduced from 15 to 10 years.
Meanwhile, the demand for business loans (both for working capital and fixed asset financing) in the fourth quarter of 2021 increased. Interest and lending conditions for loans in this category of loans were slightly tightened due to changes in risk appetite, bank capital, financial resource costs and monetary policy tightening.
The growth of business loans was largely due to the increased amount of loans in national currency. The growth of business loans in the sector was largely due to lending to the agriculture, construction, transport and communication sectors.
For small and medium-sized business loans, the interest rate on loans in national currency increased by 13.9 percent. As for foreign currency loans, the interest rate remained unchanged at 5.2 percent (euros) and 6.5 percent (US dollar).
The increase in loans to individuals was mainly due to loans in national currency, although in the fourth quarter of 2021, compared to the previous quarter, foreign currency lending increased by 20 percent.
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