Baku, Azerbaijan, June 2, 2014
By Zulfiya Gurbanova - Trend:
The International Finance Corporation is exploring Azerbaijan`s financial sector's interest in investing in agriculture, the head of the Azerbaijan Microfinance Association, Jala Hajiyeva told Trend.
"On the request of the IFC, we jointly with the Azerbaijani Insurers Association conducted a survey to determine the interest of insurance companies, banks and microfinance institutions to develop insurance and other products for entrepreneurs in the regions," she said.
Following the receipt of IFC`s approval of state structures on this initiative, relevant research will be carried out, according to Hajiyeva.
"It is necessary, first to determine and systematize the risks faced by farmers, including the use of special tools and a probabilistic model to measure the risks associated with climate change, drought and other natural disasters," she said.
AMFA has been trying to motivate organizations to finance agriculture and small business for several years, however, there are several problems in this area, according to the head of association.
"Insurance companies and banking institutions have shown great interest in investing in agriculture, but IFC believes that there are several uncertainties in this area and therefore it is necessary to use the successful experience of other countries, such as Ukraine, which successfully implemented a similar project," Hajiyeva said.
Following all the necessary procedures to launch the pilot project, IFC will choose several banks, microfinance institutions and insurance companies which can oversee this stage of the project, she said.
Hajiyeva also noted that the IFC is expected to provide technical support and partial funding of this project.
As the Association told Trend, three insurance companies - Ata Sigorta, Pasha Sigorta and Azerbaycan Senaye Sigorta - expressed their willingness to participate in the pilot project. IFC also held individual meetings with other insurers, in particular with Bashak Inam Sigorta.
The potential of the agricultural insurance market in Azerbaijan is estimated at 150-200 million manat , according to the participants of the insurance market. However, the fees for this type of insurance totaled 462,900 manats (with total insurance market of the country 149.48 million manat) for four months in 2014 compared to 387,900 manats (138.7 million manats) in the same period last year.
The payments for agricultural insurance totaled 80,750 manats (with a total volume of insurance payments on the market at 44.22 million manats).
Microfinance Association in Azerbaijan includes 35 structures, including commercial banks, non-bank credit institutions, credit unions, insurance and leasing companies.
There are 28 insurance companies and 44 banks in Azerbaijan.
The official exchange rate for May 30 is 0,7844 AZN / USD.
Edited by C.N.