News Column

STATE AGAINST "MONEY LENDERS"

February 14, 2014

Tabula



The author of the article reviews amendments to Civil Code, adopted by the Georgian Parliament on December 25, 2013, which are directed against private lenders.

For those individuals, who are not commercial banks, micro-financial organizations and non-banking depository institutions and who are called "money lenders" (private mortgage lenders), there is set margin of interest rates.

When law prohibits lending of the money with high interest rate, it will not cause termination of loan issuing. Instead, signing of guaranteed realty purchase agreement will start, the author of the article declares, adding that "no great observation is required to understand that this and other forms of law avoidance will damage borrower much more, than it was under regulation, existing before amendments".

Finally, the author of the article points that the amendments violate article of Georgia's Constitution, according to which "the state is obliged to promote development of free entrepreneurship and competition".


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Source: Sarke Economic Press Monitor (Georgia)


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