Regulatory Alerts2018-07-05 | 142/04Regulation on Assets Classification and the Creation of Reserves for Possible Losses by Microfinance Organizations
The National Bank of Georgia issued Order #142/04 to require microfinance organizations to implement standardized asset classification procedures and establish mandatory reserves for potential loan losses. The regulation defines five asset risk categories from Standard to Loss, mandating corresponding reserve rates between 0% and 100% based on collateral quality and delinquency periods. Institutions must submit monthly reports to the regulator, follow strict write-off timelines for repossessed assets, and accept the National Bank’s final authority to reclassify assets and impose sanctions for non-compliance.
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