Georgia is a historically important country located in Eurasia. Its total area is 67,000 square kilometers and it has a population of almost 4.5 million people. Agriculture and tourism are the two major contributors in the GDP of Georgia whereas the Caucasus Mountains are known well for the mining of Gold, Silver and other expensive ornaments. Since 1990’s it has been facing economic crisis.

After its independence from Russia major banks of the world (especially those of U.S) tried a lot to bring some economic development in the country. Banks offered commercial property loans to the people and business. But Georgia proved to be an unprofitable place for the banks as it was declared no. 1 state in bank failures. More than 35 banks have failed in past two years in the commercial property loan sector. The Georgian banks are unable to recover an amount of $2Billion from the commercial property loans. And according to some reports it is said that half of this amount has no hope left to get returned in future. This is really discouraging for the banks and no further banks are looking forward to provide commercial property loans in Georgia.

The banks provided commercial real estate loans to office buildings, shops, malls, apartment complexes, hotels and other businesses. But the poor economy of Georgia led the borrowers with no money to payoff the liability and the banks had to take steps to foreclosure the properties or to auction the properties to recover their amount. It was wished that if the commercial property loans are provided to the people the economy will show a positive trend as more business activities will take place and they will create more jobs and the purchasing power of the economy will improve. But it never happened. The global financial crisis further led Georgia banks to face problems and some of them had to close. At the moment, there is no silver lining left in the clouds for banks in the commercial real estate sector of Georgia, moreover, the investors are not really interested in Georgia’s property market either.