MORE CREDITS TO HONEST TAX-PAYERS
30 December, 2010
MORE CREDITS TO HONEST TAX-PAYERS

Georgian Government starts cooperation with commercial banks to help them disburse more credits under safer terms. The initiative is supposed to kill two birds with one stone: create better credit access to business and to enable banks to put their stagnated financial resources in circulation. 
Having survived the financial crisis, Georgian banking sector now “suffers” of surplus of financial resources. According to 11 months’ data of 2010, total assets of Georgian commercial banks reached an unprecedented figure of   GEL 10

billion.
“It is of great importance that the sum is fed back into the Georgian economy by means of credits to businesses in agricultural, touristic and other priority sectors,” Giorgi Kadagidze, President of the National Bank of Georgia (NBG) said.
But banks still shun crediting of business as they find that risks are still high in the post-crisis period. On the other hand, as the investment tools in Georgia are quite underdeveloped, the single and best investment tool is a banking deposit. The aggregate banking deposit portfolio exceeded GEL 4.6 billion by November 1, 2010.
To help banks reduce risks and disburse more credits, Georgian government decided to provide banks with accurate information on honest tax-payers who regularly pay taxes and observe deadlines. The initiative is confirmed by an official agreement of cooperation signed by the Ministry of Finance of Georgia (MOF), the National Bank of Georgia (NBG) and commercial banks on December 23, 2010.
According to the agreement, MOF will regularly provide the commercial banks with the complete tax history of honest taxpayers on their fulfilled liabilities. The commercial banks, on their own, express their readiness to provide simplified and preferential credits to the enterprises, take the payers’ tax history into consideration and allocate financing for their business ideas as much as possible.
“Honest taxpayers bear small risks for the banks and the banks therefore are better motivated to partner them in different projects,” Kadagidze stated.
Kakha Baindurashvili, the Minister of Finance of Georgia, underlined that honest tax-payers deserve to have better credit access. Government has already issued a Certificate of Honest Tax-payers and awarded it to five companies on December 17, 2010. This certificate is a part of new economic course undertaken by government in this December and oriented on partnership between government and business.
To foster credit access to business banks signed a memorandum of understanding with the Credit-info [earlier in this past October] to revoke the so called Black Lists of insolvent borrowers. The thing is that banks frequently refused to disburse consumer loans to persons registered even once in the black list. And borrowers were blacklisted even if they paid pack loans by one day later the deadline.  
Economic analysts approve the initiatives to reduce crediting risks and disburse safer credits. They find governmental official guarantees very important to this end.
According to Ditrikh Muller, an economic analyst with the Georgian Investment Group, Georgian business enjoyed governmental lobby and subsidizing before the crisis, and credits were disbursed based on nepotism rather than on real business-plans. But the crisis somewhat filtered business sector and banks have to be focused on real profit as they also have to pay back their loans taken at international market.
Therefore they adopted stronger crediting terms to insure risk management. And conclusion of official agreement with government is very important to legalize governmental guarantee unlike the pre-crisis period when this kind of guarantee was also practiced but based on non-transparent gentleman agreements. 
“Disbursement of credits to any willing person led the entire world not only Georgia to the crisis,” Muller told Georgian Journal. “I approve that banks have stronger risk management now and disburse credits only to really trustful businesses. It is an open secret that quite few Georgian businesses have proper know-how and management skills in fact. And it is positive step that government will officially recommend such businesses to banks. However let’s see what happens and whether or not banks will implement assumed responsibilities.”
Davit Narmania,  Executive Director of the Institute of Caucasus Economic and Social Research, also approves the recent initiatives to create better credit access to business that may lead to increased business activity ultimately.

Print
Other Stories
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
25.09.2018
26.09.2018
USD
1
USD
2.6226
2.6226
EUR
1
EUR
3.0868
3.0868
GBP
1
GBP
3.4416
3.4416
RUB
100
RUB
3.9814
3.9814
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.6226
EUR
1
EUR
3.0868
GBP
1
GBP
3.4416
RUB
100
RUB
3.9814