Azerbaijan, Baku, March.1 /Trend A.Hasanov/
Azerbaijan Microfinance Association (AMFA) has prepared a draft concept of agricultural credit guarantee fund, according to which the Fund may guarantee up to 80 percent of entrepreneur's loan.
"Risks for loans to agricultural producers and processing enterprises will be divided between the Fund and the credit institution in a ratio of 80 to 20 percent," the head of the research team Gubad Bayramov said during a presentation on Thursday.
The maximum amount of loan guarantee set at 100 thousand manat in the concept. The decision to guarantee loans up to 25,000 manat accepted by the board and approved by the Supervisory Board. Decision for loans from 25 thousand to 100 thousand manat is made by the Supervisory Board. Fund must transfer the guaranteed sum to the credit of the organization if there is a risk of default. In the event of default mortgaged property passed over to the Fund within 90 days, which organizes the sale.
Bayramov noted that a notice of the impossibility of granting guarantee to farmers and entrepreneurs must be done within ten days.
The guarantee of the agricultural credits is required so that banks can insure their risks, and were interested in lending to small and medium-sized farms, chairman of the non-banking credit organization Finance for Development Jalal Aliyev said.
"Very often, small and medium-sized agricultural enterprises can not take credit as the bank doesn't accept collateral property, which they have. Creation of credit guarantee fund can solve this problem," Aliyev said.
The concept has been prepared under The mechanism of insurance of agricultural loans joint project of Azerbaijan Microfinance Association with Oxfam.
Official exchange rate on March 1 is 0.786 AZN/USD