NBG’s Davit Utiashvili: Adjusting payment-to-income limits will minimise market disruption while keeping debt burdens at sustainable levels

“The National Bank of Georgia’s (NBG) adjustment of Payment-to-Income (PTI) debt ratios is designed to preserve responsible lending standards amid rapid wage expansion and economic growth, ensuring debt burdens for lower-income households remain at sustainable levels,” Davit Utiashvili, Head of the NBG’s Financial Stability Department, has said.

Utiashvili reiterated that while the stricter 25 per cent monthly debt service cap previously covered borrowers earning up to GEL 1,500 per month, this threshold will rise to GEL 2,000 as of 1 February 2027, and subsequently to GEL 2,500 as of 1 September 2027. The central bank expects the update to mitigate household over-indebtedness risks and reinforce overall financial stability.

The NBG official explained that the current macroprudential framework, in place since 2018, caps the maximum proportion of a borrower’s income that can be allocated to monthly debt service. In 2018, when average monthly wages were under GEL 1,000, debt service was capped at 25 per cent for those earning below GEL 1,000, and 50 per cent for incomes above that threshold. In 2022, following wage expansion, the baseline threshold was raised from GEL 1,000 to GEL 1,500.

“Average monthly wages are now approaching GEL 2,500, and we believe the time has come to raise the policy threshold from GEL 1,500 to GEL 2,500. Our primary objective is to protect low-income households from taking on unsustainable debt burdens that they cannot service comfortably without financial hardship, particularly during periods of economic stress,” the head of the Financial Stability Department stated.

According to NBG estimates, the phased rollout will cushion the impact on overall credit growth while keeping individual debt loads at optimal levels.

The central bank’s tightening of retail lending terms takes effect on 1 February 2027.