According to the National Bank of Georgia, there are 48 microfinance organizations operating in the country. Their number has declined by 19 during the past year.
With the decrease in the number of companies, the amount of assets and revenues in this area has decreased; Instead of making a profit, these firms suffer multimillion-dollar losses.
As of the third quarter, MISO assets amounted to GEL 1,312,385,965, which is GEL 336,625,320 less than in the previous year, while the total losses of these organizations amounted to GEL 16,608,563 for the nine months of 2019. For comparison, in the first 9 months of 2018 they had a net profit of GEL 35,787,939 instead of losses.
The decline in the microfinance market is primarily attributable to the introduction of a responsible lending model that has changed the rules for the banking and microfinance sector. Financial market regulations have been particularly difficult for MISOs, since they mainly lend to individuals, and their customers' risk levels are higher than average bank customers.