People are avoiding taking bank loans

There is a certain mutual alienation between banks and customers. Banks have made the conditions for issuing loans very strict and people are much less enthusiastic about taking them due to the feeling of uncertainty this year. At the beginning of last year you could see people from different banks in the shopping malls or big stores offering their products to shoppers but now this situation has radically changed.

By July 1, 2009 the amount of loans issued by banks had reached GEL 2.2 billion, but all these were issued before the Russian invasion and at the beginning of the economic crisis. The quantity of bad debts is also quite serious. Credit info suggests that 238,000 people/entities cannot pay back their loans. The banks are very loyal to their clients and give them every chance to pay back their loans: only at the final stage when all avenues are exhausted are their property and other collateral sold at auction to recover the debt. In August 86 such auctions are due to be held.

It is obvious that taking such action creates a very unpleasant reaction in the population and many potential clients are thinking twice before putting up a house or flat as collateral against a loan in this uncertain economic climate.