ISET Economist Blog

A blog about economics in the South Caucasus.

In debt and broke in Georgia

  An individual living in Kutaisi took a 1500 USD real estate secured loan from one of the microfinance institutions in 2011 and had to pay 75 USD interest rate for the following 6 months. The purpose of taking this loan was to finance treatment of her child. She was unable to cover monthly payments and prolonged the term to 10 month, but failed to cover this payments again and was fined several times. In the end, loan was restructured and monthly interest raised to 83 USD, while the amount of total loan nearly doubled to 2700 USD. As a result, she ...
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Borrow in Dollar or Lari? That Is the Question!

The Georgian lari’s depreciation against the dollar has been a pressing issue for everyone: economists and policymakers, students, housewives and even the good-for-nothing “birzhavik’s”. The weaker lari may be good news for Georgia’s export competitiveness and trade balance, yet it also pushes up the prices of anything we import. This may include some luxury items we can do without, but also many things that are absolutely essential for the Georgian economy: primary commodities, production inputs and machinery, foodstuffs and medicines. And by raising th...
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Recent Comments
Guest — StephanvonCramonUniversityofGttingenandGermanEconomicTeamGETinGeorgia
Interesting, thank you. However, perhaps it should be stated very clearly: if you earn your income in lari, borrowing in dollars m... Read More
Sunday, 25 October 2015 8:08 PM
Eric Livny
Yes, I agree with Stephan that borrowing in foreign currency is ultimately a gamble.But agree with Giorgi that this may be a gambl... Read More
Monday, 26 October 2015 9:09 AM
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