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Monday | 05 September, 2016

Trends in the Data: Declining trust in the banks in Georgia

The last few years have been turbulent for Georgia’s national currency, the Lari (GEL), the value of which started to decline in November 2014. While in October 2014 one US dollar traded for GEL 1.75, since February 2015 to date, the exchange rate has fluctuated between GEL 2 and 2.5 per dollar. Needless to say, the depreciation of the Lari has been widely covered by the media, and although it had numerous causes, a number of organizations and people were blamed for the devaluation. With this background in mind, this blog post looks at how reported trust in banks has changed in recent years in Georgia, using CRRC’s Caucasus Barometer (CB) survey data.


In 2015, for the first time since CB started asking the population about their trust in banks, more people in Georgia reported distrusting than trusting them. The decline in trust, however, started well before the GEL began to depreciate. While 27% reported trusting banks in October 2015, 53% did in October 2008.




Note: The original five-point scale was recoded into a three-point scale for this chart. Answer options “Fully trust” and “Trust” were combined into the category ‘Trust,’, while “Fully distrust” and “Distrust” were combined into ‘Distrust.’ “Neither trust nor distrust” was not recoded. The Caucasus Barometer survey was not conducted in 2014.


As is generally the case with trust in social and political institutions in Georgia, the population of rural settlements report less distrust in banks than residents of urban settlements. Nonetheless, since 2008, distrust in the banks in rural settlements has nearly tripled, from 11% in 2008 to 30% in 2015. In the capital, distrust has almost doubled during the same period.

 




Although there has been a decline in trust in the banks in recent years, this decline started before the devaluation of the Lari began in 2014. While the devaluation likely contributed to the decline in trust, the fact that trust began declining earlier shows that there is more to the story than the devaluation. 


Given that the banking system, and trust in it, is crucial to the effective functioning of a country’s economy, the government of Georgia and banks themselves should consider efforts aimed at building trust in the banking sector.

What factors are at play in declining trust in the banks in Georgia? Join the conversation on the CRRC-Georgia Facebook page here, and to explore more data on Georgia and the South Caucasus, visit our online data analysis tool (ODA).

13.05.2014 | Tuesday

Common Challenges Facing the Elderly in Georgia

According to the World Health Organization (WHO), “Multiple social, psychological, and biological factors determine the level of mental health of a person at any point in time. In addition to the typical life stressors common to all people, older people are more likely to experience events such as bereavement, a drop in socioeconomic status with retirement, or a disability.” 
19.05.2014 | Monday

Paternalism in Georgia

According to the Stanford Encyclopedia of Philosophy, paternalism is “the interference of a state or an individual with another person against their will motivated by a claim that the person interfered with will be better off or protected from harm” (from the Latin pater for father). Simply put, paternalism refers to treating people as if they were children. The Caucasus Barometer (CB) assesses attitudes toward governance among Georgians. Who thinks citizens should be treated like children by the government (i.e. the paternalistic view) rather than as employers? Using data from the CB 2013, this blog post focuses on the following qualities of citizens: education level, economic condition and source of household income in order to better understand this paternalistic view in Georgia.
07.10.2014 | Tuesday

The Wave of the Future: Optimism, Pessimism and Fatalism in Georgia

A recent CRRC regional blog post analyzed the presence of fatalism in Georgia. The post cited CRRC Caucasus Barometer (CB) data which shows that in 2013, 28% of Georgians agreed that “everything in life is determined by fate.” While the CB findings demonstrate that a sizeable portion of the adult population is fatalistic about the future, Georgians are increasingly likely to see that future in a positive light, whether it be determined by fate or not.
04.12.2014 | Thursday

SME Performance in Georgia and Armenia: Part 2

As discussed in the first blog post of this series, the results of the CRRC Caucasus Barometer (CB) survey show that Georgians demonstrate higher levels of interpersonal and institutional trust than Armenians. These types of trust are important indicators of social capital, which is often taken as a necessary condition for the presence of a robust, productive entrepreneurial class and small and medium enterprise (SME) sector.
09.11.2015 | Monday

Household income and consumption patterns in Georgia

After the collapse of the Georgian economy in the 1990s, the country slowly started to recover, and between 2000 and 2014, the gross national income grew from $3.4 billion to $16.7 billion (in current USD). According to the National Statistics Office of Georgia, the official unemployment rate in Georgia was 12.4% in 2014, but according to numerous surveys the rate is much higher.
13.07.2012 | Friday

PERCEIVED POVERTY IN GEORGIA: RESULTS OF THE 2011 CAUCASUS BAROMETER

The 2011 Caucasus Barometer asked the Georgian population, “Relative to most of the households around you, would you describe the current economic condition of your household as very good, good, fair, poor or very poor? 
27.02.2008 | Wednesday

Inflation in Armenia? | Lecture by IMF Representative

Readers here may not be aware that actually our Armenian CRRC also runs its own blog, to announce and describe CRRC's events. One of the most recent events was a lecture by the IMF Resident Representative in Armenia, Dr. Nienke Oomes.
12.09.2008 | Friday

Doing business in Azerbaijan: easy in theory

Results of the World Bank’s Doing Business 2009 project, claims to present "objective measures of business regulations and their enforcement across 181 economies and selected cities at the sub-national and regional level", were made public today.