In the last quarter of the reporting year, MFO's interest income increased by more than 30 million.The credit portfolio exceeded half a billion. Crystal's portfolio is mainly represented by retail loans, including loans to individuals for business financing.MFO's income from agro-sector lending is up to 16.8 million GEL (Q3/2024 - 12.4 million) and from financing the trade and service sector is up to 22 million GEL (Q3/2024 - 16,162,503).The largest amount, up to 65.2 million GEL, is from consumer lending. (Q3/2024 - 47,834,822).Crystal is ready for transformation into a bank, awaiting a license from the National Bank of Georgia.The main requirement for transforming into a microbank was lending to real businesses, which only 2-3 out of 33 MFOs meet, and Crystal is one of them (MBC has already received a banking license). The remaining organizations are mainly pawnshops, including the largest pawnshop - Rico.

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Strength in Stability: The Role of the National Bank of Georgia“The National Bank of Georgia (NBG) has been implementing efficient monetary policy and ensures financial stability. By implementing effective monetary policies and timely interest rate adjustments, the NBG has successfully anchored inflation expectations while fostering a conducive environment for business and consumer confidence”, - the article reads.The journalist, despite global inflationary pressures, draws attention to the lower-than-target inflation rate in Georgia, which, in his assessment, is the result of the NBG's proactive approach, and notes that the NBG's "strength lies in stability."“Despite global inflationary pressures, Georgia’s inflation rate was brought down from 11.9 percent on average in 2022 to just 2.5 percent in 2023 and 1.1 percent in 2024. Since March, 2023 inflation is maintained well below the 3 percent target-a testament to the NBG’s proactive approach”, - the author writes.The bank has also taken significant steps to bolster financial stability. Georgia’s banking sector remains resilient, with adequate liquidity and well-capitalised institutions.Capital Finance International (CFI.co) is a quarterly magazine and online resource that actively covers business, economic, and financial topics. Founded 12 years ago, CFI.co is headquartered in London and operates with an experienced editorial team. The print version of the publication is distributed at major international forums such as the World Economic Forum in Davos, OECD conferences, the Annual Investment Meeting (AIM) in Dubai, Opal Group investor conferences, the World Investment Forum, and others. Each quarterly print edition of CFI.co reaches an average of 186,000 readers, while its online platform garners approximately 410,000 views per month.

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Georgia’s banking sector remains resilient, with adequate liquidity and well-capitalised institutions. Additionally, initiatives like the development of a green bond market highlight the NBG’s commitment to sustainable growth. Georgia’s first corporate green bond issuance in 2022-focused on renewable energy projects-is a prime example of how financial innovation is being leveraged to enhance economic sustainability.Furthermore, the NBG has significant achievements in reducing the vulnerability of the financial sector to foreign currency fluctuations and external shocks. Since 2017, the NBG has implemented robust macroprudential measures to decrease the dependence on foreign currency fluctuations. To that end, the NBG has progressively increased the limits on unhedged foreign currency loans on several occasions.These efforts have considerably reduced the share of foreign currency loans from 80% in the early 2010s to approximately 43% today. Similarly, the share of foreign currency deposits, which stood at comparable levels in the early 2010s, has decreased to 52%. Consequently, Georgia's financial sector has become more resilient to external shocks.Capital Finance International (CFI.co) is a quarterly magazine and online resource that actively covers business, economic, and financial topics. Founded 12 years ago, CFI.co is headquartered in London and operates with an experienced editorial team. The print version of the publication is distributed at major international forums such as the World Economic Forum in Davos, OECD conferences, the Annual Investment Meeting (AIM) in Dubai, Opal Group investor conferences, the World Investment Forum, and others. Each quarterly print edition of CFI.co reaches an average of 186,000 readers, while its online platform garners approximately 410,000 views per month.

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“Over the last years, the NBG has implemented a comprehensive regulatory and supervisory framework aimed at combating money laundering and terrorism financing (AML/CFT) in Virtual (Crypto) Assets Sector. As a result, in 2024 the Council of Europe’s Committee of Experts on the evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has positively assessed the measures taken by the National Bank of Georgia to prevent money laundering and terrorism financing (AML/CFT). This assessment has elevated Georgia’s compliance with Recommendation 15 of the Financial Action Task Force (FATF) from “Partially Compliant” to “Largely Compliant”, making it one of only seven MONEYVAL CoE member states to achieve this rating,” states the article.Capital Finance International (CFI.co) is a quarterly magazine and online resource that actively covers business, economic, and financial topics. Founded 12 years ago, CFI.co is headquartered in London and operates with an experienced editorial team. The print version of the publication is distributed at major international forums such as the World Economic Forum in Davos, OECD conferences, the Annual Investment Meeting (AIM) in Dubai, Opal Group investor conferences, the World Investment Forum, and others. Each quarterly print edition of CFI.co reaches an average of 186,000 readers, while its online platform garners approximately 410,000 views per month.

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Strength in Stability: The Role of the National Bank of Georgia“The National Bank of Georgia (NBG) has been implementing efficient monetary policy and ensures financial stability. By implementing effective monetary policies and timely interest rate adjustments, the NBG has successfully anchored inflation expectations while fostering a conducive environment for business and consumer confidence. Despite global inflationary pressures, Georgia’s inflation rate was brought down from 11.9 percent on average in 2022 to just 2.5 percent in 2023 and 1.1 percent in 2024. Since March, 2023 inflation is maintained well below the 3 percent target-a testament to the NBG’s proactive approach.The bank has also taken significant steps to bolster financial stability. Georgia’s banking sector remains resilient, with adequate liquidity and well-capitalised institutions. Additionally, initiatives like the development of a green bond market highlight the NBG’s commitment to sustainable growth. Georgia’s first corporate green bond issuance in 2022-focused on renewable energy projects-is a prime example of how financial innovation is being leveraged to enhance economic sustainability.Furthermore, the NBG has significant achievements in reducing the vulnerability of the financial sector to foreign currency fluctuations and external shocks. Since 2017, the NBG has implemented robust macroprudential measures to decrease the dependence on foreign currency fluctuations. To that end, the NBG has progressively increased the limits on unhedged foreign currency loans on several occasions.These efforts have considerably reduced the share of foreign currency loans from 80% in the early 2010s to approximately 43% today. Similarly, the share of foreign currency deposits, which stood at comparable levels in the early 2010s, has decreased to 52%. Consequently, Georgia's financial sector has become more resilient to external shocks.The NBG and Georgian financial institutions, as it has been many times underlined by the respective feedbacks and assessments of international partners, act fully in accordance with the financial sanctions imposed on the Russian Federation/Belarus by the United States and other respective parties.Over the last years, the NBG has implemented a comprehensive regulatory and supervisory framework aimed at combating money laundering and terrorism financing (AML/CFT) in Virtual (Crypto) Assets Sector. As a result, in 2024 the Council of Europe’s Committee of Experts on the evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) has positively assessed the measures taken by the National Bank of Georgia to prevent money laundering and terrorism financing (AML/CFT). This assessment has elevated Georgia’s compliance with Recommendation 15 of the Financial Action Task Force (FATF) from “Partially Compliant” to “Largely Compliant”, making it one of only seven MONEYVAL CoE member states to achieve this rating,” states the article.Capital Finance International (CFI.co) is a quarterly magazine and online resource that actively covers business, economic, and financial topics. Founded 12 years ago, CFI.co is headquartered in London and operates with an experienced editorial team. The print version of the publication is distributed at major international forums such as the World Economic Forum in Davos, OECD conferences, the Annual Investment Meeting (AIM) in Dubai, Opal Group investor conferences, the World Investment Forum, and others. Each quarterly print edition of CFI.co reaches an average of 186,000 readers, while its online platform garners approximately 410,000 views per month.

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According to the statistics of the National Bank of Georgia, card transactions in December (with Georgian cards) exceeded 900 million (11/2024 - 868 million). Total spending in 2024 is 10 billion GEL (2023 - 7.8 billion).Georgians spent the most in Israel. Operations with POS terminals are equivalent to 261 million GEL (2023 - 277 million). In the European Union, Poland and Spain are leading in cashless transactions.Payments outside the country with POS terminals (expressed in GEL).

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The annual growth rate of business loans is 17.48% (01.12.2023 – 17.12%Y.Y). The business portfolio of banks is still highly dollarized. The dollarization rate is 59%, down only 1% since September (09/2024- 60%).According to December figures, a total of 288,000 loans worth 35 billion GEL were issued for business financing, of which 24,840 loans worth 20.6 billion GEL were equivalent in foreign currency.Over the year, the number of foreign currency loans has increased, while GEL issuances to businesses have decreased. Accordingly, there is an increase in foreign currency from 23,265 to 24,840. There is a decrease in GEL from 272,840 to 263,110.

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The deposit portfolio decreased by 100 million GEL to 1.476 billion GEL (2023 – 1.575 billion, -6.3%Y.Y).More than 1/2 of Cartu's deposit portfolio is current accounts, of which more than 80% is in foreign currency. Term deposits also have a high dollarization rate (80%).Cartu Bank serves more legal entities than individuals, although the share of companies in deposits has decreased. It reached 900 million GEL a year ago and has decreased to 750 million GEL. As of 01.01.2025, deposits of legal entities have increased to 800 million GEL (2023 - 675 million).

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The digital bank has violated client identification/verification requirements with 3 companies, as well as in the part of document verification, which is required by the Financial Monitoring Service.The NBG President's Order No. 48/04 on the implementation of preventive measures against clients electronically has been ignored (the client's electronic identification/verification condition has been violated).The details of the transaction, information about the parties, and the client's risk level have not been properly studied. The client identification procedure has been violated.There is an additional violation in relation to 2 clients, regarding improper implementation of enhanced preventive measures. The origin of property and funds has not been studied during monitoring of business relations.In the case of the first client, the requirements of the National Bank of Georgia for assessing the risk of legalization of illegal income and financing of terrorism were violated.In the case of the 2nd client, who falls into the high risk category, is not accompanied by additional permission from the management. The law requires permission to establish or continue a business relationship (Article 18 d).

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According to the updated report of Creditinfo, as of 01.01.2025, there are 1,588,300 active borrowers (01.08.2024 – 1.577 million). The balance on loans has increased to 45.8 billion GEL (01.08.2024 – 43 billion).As you know, Creditinfo only records loans up to 10 million GEL. The limit was increased at the end of 2022 (previously it included loans of 3 million).As of 01.01.2025, 140,260 loans from 82,365 borrowers were overdue for up to 3 years from the bank's issued credits, with a total balance of 1.405 billion GEL.As of August of this year, there were almost 10,000 more problem borrowers (01.08.20124 - 91,500 borrowers, 153,600 loans). The volume is almost unchanged at 1.4 billion.According to Creditinfo, by the end of 2024, a total of 50.3 billion GEL of active loan contracts (banks, MFOs, Pawnshops, leasing companies) had been signed. Including the portfolio of leasing companies is within 0.6 billion GEL.Between September and December, the share of leasing companies and loan issuing entities increased, while that of banks decreased, to 81.7% (01.08.2024 – 91.3%).

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