Baku, Azerbaijan, June 25
By Zulfiyya Gurbanova - Trend:
The "e-mortgage" project, the launch of which is scheduled for July 1, will only have a positive impact on the process of issuing mortgage loans for house purchasing, General Director of the Central Bank of Azerbaijan (CBA), Rashad Orujov told Trend.
At present, five authorized banks are connected to the "e-mortgage" pilot project which was launched by the Azerbaijan Mortgage Fund (AMF) under the CBA, he said.
"The implementation of this project will facilitate the activity of fund and banks in the issuance of mortgages, as well as people who use these services. They will have the opportunity to apply for a loan in electronic form, as well as to track the stage of their application. Futhermore, thanks to this system, borrowers will be able to pay the loan in any branch of banks connected to it, as well as in electronic form and in postal offices, " Orujov said, adding all the authorized AMF banks will be connected upon the launch time of "E-mortgage".
The AIF launched the portal last December, in which the fund's authorized organizations, primarily banks have connected.
Today the authorized banks of the AMF are 28 banks [the country has 43 banks]. The participants of the mortgage market are also 21 insurance companies [28 in total] and 14 appraisal organizations.
"One-off payment in the amount of 1,000 AZN was set for the registration in the"e-mortgage" portal," the market participants said earlier. "The banks which have access to the portal will process the applications and place them on the portal."
The introduction of e-mortgage will lead to the increase of the number of the AMF authorized organizations, according to the banking market participants. Furthermore, the efficiency will be increased in the sphere of issuing mortgage loans, as well as well as the access to mortgage in the region will be expanded.
Azerbaijan has introduced electronic-digital signatures services since September 2011 and today a task has been set before all the state agencies to apply electronic services within frame of their activity.
"The main objectives of the government are provision efficiency and resolution of housing problems in the regions of Azerbaijan, where the market is growing rapidly. The process of issuing e- mortgages, in turn, contributes to the revitalization of the regional branches of the banks, increase in their number, increase in the revenue of the builders," the market's participants believe.
At present, along with the capital Baku, the issuance of mortgage loans provided by the AMF is carried out in Sumgait and Ganja, but today there is also a great demand for these loans in other regions of the country.
The loan amounting to 25.85 million AZN was provided by the AMF in the first quarter of 2014, which allowed to increase the total volume of housing finance up to 456.75 million AZN.
The process of mortgage lending, which started in the country in March 1, 2006, was suspended in the summer of 2007 due to lack of funds. The process was first renewed in June 1, 2009.
The total amount of refinancing loans issued to the banks earlier, was 14.83 million AZN during the first quarter. In total, since the beginning of the mortgage lending by the AMF bonds amounting to 315 million AZN has been placed. The funds from the bonds placement are used for financing conventional mortgages, and the funds for social mortgage allocated from the state budget annually.
The maximum size of a conventional mortgage through the AMF is 50,000 AZN at a rate of 8 percent and a maturity of 25 years. The size of a social mortgage is 50,000 AZN at an annual rate of 4 percent and the term of 30 years. The initial payment under the social mortgage is 15 percent, while for a conventional loans - 20 percent.
Mortgage terms are as follows: loans must be issued in national currency, manat, and only to the citizens of Azerbaijan, the subject of the mortgage can only be an apartment or private house, the amount of the mortgage should not exceed 80 percent of the market value of the property, the monthly payment for a loan must not exceed 70 percent of monthly income of the borrower, the presence of an agreement on life insurance and other conditions.
Preferable conditions are granted to members of families of war victims, families of National Heroes of Azerbaijan, internally displaced persons, civil servants with at least a three years' experience, candidates and doctors of science, persons making special contributions to sport, as well as the military with at least a three-year service term. Each family having the right to such a mortgage loan can use the opportunity only once.
The official exchange rate on June 25 is 0.7843 AZN / USD.
Edited by CN