| Most in Demand Types of Loans in 2009 in Georgia |
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16/11/2009 18:42 (815 Day 03:33 minutes ago) | |||||
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The FINANCIAL -- Consumer, mortgage and business loans were the most demanded type of products among loans offered by Georgian banks in 2009.
VTB Bank Georgia and KOR Standard Bank named consumer loans the most demanded in 2009. For Bank of Georgia the most demanded type of loan was the mortgage loan, occupying 41% of its total loan portfolio for the year. ProCredit Bank remains focused on its target group: small and medium sized businesses.
At Bank of Georgia , one of the leading Georgian banks, the Retail Banking loan portfolio, as of 30 September 2009, is as follows: mortgage loans - 41% of the loan portfolio: micro loans - 11%; credit cards and overdrafts - 17%; consumer and other - 31%.
The total amount of the retail loan portfolio of Bank of Georgia is GEL 809 million.
In November 2009 Bank of Georgia lowered the interest rates of its retail banking loans. The interest rate on mortgage loans is currently 14.5%, on vehicle loans - 16%, and consumer loans - from 20%.
“This is the second time we have lowered the interest on mortgage loans this year. During the crisis the interest rate on mortgage loans was 18%. We lowered it to 16% in September 2009. Interest on car loans during the crisis was 17%. Interest on consumer loans was also lowered, from 24% to 20%,” says Sophio Balavadze, Corporate Communications and PR manager of Bank of Georgia .
RB and WM loan loss reserve at Bank of Georgia , by loan type, as of 30 September 2009, is: micro loans - 5.7%; mortgage loans - 18.6%; credit cards and overdrafts - 58.2%; consumer and other - 17.5%. Loan loss reserve on these loans on the whole is approximately 4.5% of gross loans.
The retail banking loan portfolio at Bank of Georgia , in the same period last year, as of September 30, 2008, was as follows: mortgage loans - 32%; micro loans - 18%; consumer loans - 19%; card overdrafts and credit cards - 14%; car loans - 8%; pos loans - 6%; legacy retail loans - 4%.
The total of retail loans at Bank of Georgia in 2008 amounted to GEL 931 million.
Over the ten years of its operation in Georgia, ProCredit Bank has been financing its target group: small and medium sized businesses. “Due to its focus on supporting small business, business loans have always been the most demanded and popular loans,” Tinatin Nadiradze, PR specialist of ProCredit Bank Georgia, told The FINANCIAL.
In 2009 the most demanded loan was a business loan, up to GEL 17,000 disbursed without collateral.
“The popularity of this type of loan was due to the simplicity of the disbursement procedure and absence of collateral,” Nadiradze says.
In 2009, ProCredit Bank disbursed GEL 62 million worth of GEL 17,000 business loans without collateral.
Nadiradze says that the quality of the total loan portfolio remained very good, with the loans in arrears being less than 3%. The number of bad payers for business loans without collateral was only 126 in 2009, and currently this number has decreased to 76.
“The most demanded loan in 2009 at VTB bank Georgia was the customer loan. According to our criteria, every client who gets a salary paid in to an account of our bank is able to get a loan with ease. Clients are also able to take out loans ensured by deposits,” says Nino Bendeliani, Head of Marketing and PR Department of VTB Bank Georgia.
From the beginning of 2009 till the present day the total sum of loans given out by VTB Bank Georgia is USD 16,243,000.
“The maximum sum of a loan at VTB Bank Georgia is USD 50,000. Interest rates vary per year from 16 to 37%. Their terms are usually around 48 months,” Bendeliani says.
Bendeliani notes that in 2009 VTB Bank Georgia did not increase interest rates for consumer loans. “On the contrary, at the end of 2009 the Bank plans to revise the numbers of its interest rates and reduce them. We also plan to revise terms for hypothec credits,” she says.
Bendeliani says that consumer loans have always been the most demanded type of loan at VTB Bank. “Our customers are able to take out consumer loans for the purpose of taking a holiday, purchasing electronics, inventories, furniture, a car or living space, also to finance study or to cover other expenses,” she says.
“The reason for the popularity of consumer loans amongst our customers is that unlike some customers who have to cover their fiscal responsibilities towards other banks. Our customers have just one type of loan and lower monthly interest rates to pay,” says representative of KOR Standard Bank .
In 2009 KOR Standard Bank gave out more than GEL 7,000,000 worth of loans.
The average term of a loan at KOR Standard Bank varies from 12 to 60 months. As for interest rates they vary from 20 to 30%.
Before the beginning of the global recession the number of bad payers from the total loan portfolio of KOR Standard Bank was 2%. After the beginning of the economical downturn the number reached 6% of the total volume of its loan portfolio. “Currently the situation is regulating and returning to stability,” representatives of bank told The FINANCIAL.
In 2009 interest rates on different types of loans, in KOR Standard Bank increased to 36%. As for the terms, they were reduced to 36 months. “Before the beginning of the global recession the most demanded types of loans at our bank were hypothec and auto loans,” officials of bank say.
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