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Banks Offering Business Loans at Unprecedentedly Low Interest Rates

Published: October 18, 2013 | 3:59 pm
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A gesture of good will to support businesses, or a result of competitive environment? The banking sector is issuing business loans at unprecedentedly low interest rates. Liberty Bank has introduced a fixed 9% rate on business loans. More recently, the interest rates were reduced by Bank Republic, too. According to spokesman Zura Kartsivadze, the bank has halved the interest rates on micro business loans since last year, reducing them to 13.95% from last year’s 28%. In his opinion, the reduction of interest rates has mainly been driven by the lower risks associated with financing businesses. Nowadays, companies can clearly explain what they will be spending the loans on, Mr. Kartsivadze says.
In contrast, the economist Irakli Lekvinadze regards strong competition within the banking sector as the main driving force behind the downward trend on interest rates. According to him, the establishment of the Co-Investment Fund has also contributed to the trend.

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