2018-11-19
Today, I would like to inform you about a very important decision that will lift the burden off the shoulders of hundreds of thousands of families.
We all agree that overcoming poverty is unimaginable without eliminating excessive debt, as clearly evidenced by the latest UNICEF study, which directly points at a cause and effect relationship between excessive debt and poverty and reveals that the burden of debt on the shoulders of many families is heavy enough to affect the development of children and adolescents.
This problem has plagued our society for years, and today over 700,000 citizens are on the so-called black list practically depriving them of carrying out comprehensive economic activities.
This problem was emphasized by Mr. Bidzina Ivanishvili, the Chairman of our Party, immediately upon his return to politics.
I also spoke about it both as Minister of Finance and during the approval of the new Cabinet by Parliament of Georgia. Later, at the Government's meeting, we also pledged to take principled steps to address the problem of the so-called black list before the end of the year.
I would like to inform you that long and complex negotiations have been conducted, and I am happy that both the banking and non-banking sectors, including debt collection agencies, have, for the most part, exhibited high social responsibility, allowing us to make a decision that will lift the burden off the shoulders of hundreds of thousands of families.
I am especially thankful to the Cartu Charity Foundation. Without its support, this extremely important initiative would never be carried out.
I would like to inform the public that almost 95% of the debts on the black list consist of loans with a principle sum not exceeding 2,000 GEL. We are talking about the financial responsibility of more than 600,000 citizens to banks, online organizations, or a variety of other financial institutions, their debts amounting to about 1.5 billion GEL.
Today's decision annuls this 1.5 billion GEL debt of our citizens.
Notably, this category includes almost 150,000 socially vulnerable persons and tens of thousands of our citizens with limited abilities.
Work is underway on the registry bases for debtors, and the process of debt annulment will start on December 15 to be completed on December 31. 600,000 of our citizens and their families are guaranteed to be removed from the black list before December 31 and to celebrate New Year's Eve debt-free.
An agreement to annul the debts of these 600,000 citizens has already been reached, but we continue working, and as other financial organizations join our initiative, the number of debt-free citizens will grow.
Unfortunately, the problem of citizens unjustly victimized by usury remains quite challenging. Allow me to inform you that we are working in this direction as well, and I do hope that we will produce positive outcomes in this regard, too.
Our approach involves overcoming excessive debt as a risk and a heavy burden in general. Accordingly, we continue working to ensure against the bulk of our citizens' revenues going to cover loan services and to equalize our debt service coverage ratio with healthy international practices.
Eliminating excessive debt is a precondition of overcoming poverty. Today's announced decision will enable hundreds of thousands of our fellow citizens to become fully engaged in the country's economic and social life, this way enhancing the sustainability of our economy and making our banking and financial sector healthier.
A human being has always been and will remain the ultimate value cherished by our political team.