Over one-third of Georgian pensioners turn to loans

In Georgia, more than a third of pensioners and social benefit recipients, totalling 354,000 individuals, have opted for pension loans, according to a report submitted by Liberty Bank to the National Bank. This number constitutes over one-third of the population receiving various social benefits.

The third-quarter data reveals a slight decrease of GEL1mn ($370,000) in the total portfolio of pension loans, amounting to GEL401mn, which accounts for 15.5% of Liberty Bank's overall credit portfolio of GEL2.6bn.

The financial report indicates that the average size of a single pension loan stands at GEL1,132 ($420). During the third quarter, the weighted average nominal interest rate for these loans was 29.4%, showing a 5.5 percentage point decrease in the average effective rate compared to the previous year.

It's noteworthy that in May 2022, Liberty Bank secured the right to issue pensions for the next seven years through a state tender, earning GEL15mn annually or a total of GEL105mn for the service. This figure encompasses both old-age pensioners and recipients of social pensions.

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