ECONOMY
02.06.20 11:05
Starting June 1 the National Bank of Georgia (NBG) will launch a new tool for liquidity management to support the financing of small and medium-sized businesses in Georgia, announces the NBG.
This tool consists of two components: the first is for commercial banks, which will have the opportunity to receive liquidity support from the NBG in exchange for mortgaging the loan portfolio, while the second component is for micro-financing organizations, which will be able to attract loan resources from commercial banks with the support of the NBG within the loan portfolio that is in accordance with the criteria established by the NBG.
The new mechanism will ensure liquidity risk reduction and an uninterrupted supply of financial resources to creditworthy borrowers. This will help the economy recover quickly and return to the pre-crisis trajectory of the country's economic growth", says the NBG.
The NBG said that with the gradual restoration of economic activity it became important to take additional measures in order to avoid future liquidity risks.
"Banks in Georgia are particularly wary of lending to small and medium-sized businesses as there is increased uncertainty and risk on the market. In this situation, in order to maintain credit and, consequently, business activity, a number of tax benefits and state guarantee tools will be put in place.
“The NBG will ensure that this process is conducted smoothly in order to support the liquidity of the financial system, as it is the function of central banks to maintain a sufficient level of liquidity in the market in order to continue the business lending process. One of the ways to achieve this is to provide liquidity in exchange for mortgaging non-liquid assets", says the NBG.
source: AGENDA
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