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Economist warns against state meddling in Georgia’s banks

By M. Alkhazashvili
(Translated by Diana Dundua)
Thursday, January 17
Local economists say the government is on the right track in proposing cheap loans for individual entrepreneurs, but some fear authorities will deliver the goods by putting pressure on private banks.

Economist Soso Tsiskarishvili is one of the critics. The state-subsidized loan problem, due to start this year, needs to be conducted entirely aboveboard and in response to market demands, he told the newspaper Akhali Taoba.

“This should be a mutual relationship: one side should be able to deliver the credit and other side should want to take it. And if any government officials are involved in his process, it won’t work,” Tsiskarishvili said.

The economist said that widespread impressions of state interference in local private businesses would only be confirmed, with damaging results, if the government leans on banks to carry out its vote-winning cheap loans program.

The ideal backer for the program, Tsiskarishvili added, would be investment funds seeking low-risk, low-yield investments.