Georgia Mortgage Lending Up 46.5% as Larization Hits 56.8%

Georgian banks issued GEL 3.58 billion in mortgage loans in the first seven months of 2026 - a 46.5 per cent jump on the same period last year - as household credit demand accelerated alongside one of the fastest growth runs in the region. Bank deposits climbed 21 per cent year on year to GEL 73.9 billion.

The larization milestone

Buried in the deposit figures is the number the National Bank of Georgia has chased for a decade: larization - the share of deposits held in the national currency - reached 56.8 per cent. For a banking system that spent most of the 2010s majority-dollarized, a durable lari majority changes the transmission of monetary policy: rate decisions in Tbilisi now bite on a majority of the deposit base directly.

The mortgage surge and the larization gain reinforce each other. Regulators require most household mortgages to be issued in lari, so every year of strong mortgage growth mechanically deepens local-currency intermediation - and reduces the balance-sheet currency mismatch that made Georgian households vulnerable to lari depreciation episodes.

What is driving demand

Three forces sit behind the credit acceleration. Georgia's economy expanded 7.9 per cent in the first half, well ahead of forecasts. Tbilisi and Batumi property markets continue to absorb migration- and tourism-driven demand. And the banking system is competing hard for retail assets after several years of record profitability.

The caveats

Mortgage books growing at close to 50 per cent invite supervisory attention anywhere. The NBG's macroprudential toolkit - payment-to-income and loan-to-value caps - has been active since 2019, and the test will be whether underwriting discipline holds as banks chase share. A construction-heavy growth model also concentrates collateral risk in real estate valuations that have run well ahead of income growth in Tbilisi's prime districts.

For now, the data describe a banking system funding a real-economy expansion from an increasingly local deposit base - the configuration central bankers in the region have spent years trying to build.

Further reading

• Georgia's Economy Grows 7.9% in First Half of 2026
• S&P Calls Armenia's Banks Well Capitalized