Tbilisi – On April 22, 2008 from 10:00 a.m. to 2:00 p.m. the USAID-supported Small and Medium Enterprises (SME) Support Project is hosting the workshop Minimum Quality Standards for Mortgage Lending (MQS) to take place in the Courtyard by Marriott Ballroom.
The USAID’s SME Support Project developed a manual on minimum quality standards at the request of Georgian lenders interested in pursuing international standards in mortgage lending and ultimately concerned with being able to sell their mortgage loans into the secondary market. Understanding Georgian market needs, the European Bank for Reconstruction and Development lent their support to this endeavor.
According to Robert Wilson, USAID/Caucasus Mission Director, “The strength and stability of the banking system is vital for sustainable development of the country. Currently, it is one of the most developed sectors of the economy and continues to advance, bringing in new products and services. Consequently, the development of mortgage lending in Georgia has become one of the important agenda items requiring assistance in an urgent way.”
A consultant to the SME Support Project, Victoria Stefaniuk, developed the guide manual to provide valuable insight to banks, microfinance institutions and other lenders in Georgia on how to structure their mortgage lending activities to meet international standards. In addition, building a strong primary mortgage market in Georgia will allow further development of a secondary market to become available to lenders.
The main function of MQS lies in setting standards in all areas of the mortgage lending process, which comprises loan origination, servicing and risk management. Standards serve to prepare the mortgage loan portfolio so that banks have in place the necessary infrastructure for the issuance of mortgage-backed securities (MBS).
According to Dan A. Berkshire, SME Support Project’s Chief of Party, “Most commercial banks do not have access to cheap long-term funds, which is a major driver of the interest rates on loans. The question of how this situation can be improved lies in further development of mortgage lending in Georgia. With the proper legal and economic environment, standardization of the mortgage market and access to credit will progress considerably. Obtaining cheaper funds or refinancing through selling related mortgage securities on the capital market will advance the process.”
Robert Wilson, USAID/Caucasus Mission Director; Zurab Gvasalia, President of the Association of Banks of Georgia; Dan A. Berkshire, SME Support Project Chief of Party; and Victoria Stefaniuk, Consultant to the SME Support Project will make speeches at the opening.
SME Support Project is an IESC implemented four-year USAID program that supports the growth and development of small and medium-sized enterprises (SMEs) in Georgia to improve the business climate and jointly resolve issues impeding robust economic growth. The project fosters a continuous dialogue with the National Bank of Georgia, private sector commercial banks and other financial institutions to address market imperfections and meet demand for SME financing.
About USAID in Georgia: During the past 15 years, the American people, through USAID, have invested more than $964 million in Georgia. More than 20 projects worth $44 million a year are currently being implemented. These projects are designed to support Georgia’s transition to a free and prosperous democracy and include initiatives to quicken economic growth, develop democratic institutions, and improve health and education.
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