ISET

On April 30, 2018 Dr. Yasya Babych (ISET/MPRC) presented at the Georgian Banking Forum 2018 organized by The Financial. The conference was dedicated to the future of banking and took place at the Biltmore Hotel in Tbilisi. Among the invited speakers were Irakli Kovzanadze (Chairman of Finance and Budget Committee of the Parliament of Georgia), Murtaz Kikoria (Vice-Governor, Member of the Board of the National Bank of Georgia), Andras Hemberger(Mastercard), Kakha Kiknavelize (CEO of Bank of Georgia) and other notables.

Dr. Babych spoke about the issues of financial inclusion and financial literacy in Georgia. It is well-known that stability of the financial system and the strength of the entire economy depend greatly on the extent to which ordinary households and businesses are financially integrated. Although in the last 27 years Georgia managed to build a strong, resilient financial system, it still remains a country with high poverty rates, low youth participation in the economy (hence the low financial inclusion of the young), low usage of the newest financial technologies, relatively low financial literacy levels, and alarmingly low savings rates for the elderly.

According to NBG, the volume of total remittances to Georgia amounted to 1,379 million USD in 2017, a 19.8% YoY increase. The recovery of remittances is a clear sign that the economies of Georgia’s partner countries continue to improve. All top source countries of money inflows to Georgia showed a notable increase: Russia (+15.4% YoY), Italy (+17.9% YoY), the United States (+11.2% YoY) and Greece (+13.4% YoY).

Money inflows from Israel showed unprecedented annual growth of 96.1%. This stemmed from the wave of Georgian emigration that started after the countries ratified a visa-free regime in November 2013. Georgian citizens are allowed to stay in Israel without a visa for a maximum of 90 days in any six-month period. In that year only four Georgian citizens sought asylum in Israel, whereas in 2015 the number was more than 700, and about 6,000 in the following year. However, the situation has recently changed. First, there has been an increase in the number of Georgian citizens denied entry to Israel at the border. Secondly, in February 2017 the Ministry of Internal Affairs of Israel recognized Georgia as “a safe country”.

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