TOP 10 Azerbaijani banks in mortgage lending for first six months

Baku, Azerbaijan, July 22

By Zulfiyya Gurbanova - Trend:

Azerbaijan's authorized banks have issued 17,931 mortgage loans since the beginning of the Azerbaijan Mortgage Fund's (AMF) activity under the Central Bank. Some 2,900 loans were issued as part of the social mortgage.

The table shows the top 10 Azerbaijani banks in terms of the number of issued refinanced mortgage loans as of the second quarter of 2014.

Over 10,000 loans have been issued to residents of Baku, 1,216 loans - Sumgait, 603 - Absheron etc. Some 81.9 percent of borrowers are men, while 18.1 percent are women. Some 67.3 percent of recipients of mortgage loans have families.

The average monthly income of 35.9 percent of borrowers is over 1,100 manats, 21.7 percent - varies within 700-900 manats, 18.8 percent - 500-700 manats, 16.6 percent - 900-1,100 manats, 6.1 percent - 300-500 manats, 0.9 percent - less than 300 manats.

A total of 186 million manats were allocated from the state budget to finance social mortgage. As of July 1, 2014, some 2,900 loans worth 101.6 million manats were issued with concessional conditions.

As of July 1, 2014, the loans worth 385.84 million manats were issued through the AMF as part of the conventional mortgage. Conventional mortgage is issued from the funds raised from the placement of mortgage bonds.

Currently, the maximum amount of a common mortgage loan through the AMF is 50,000 manats at a rate of eight percent with a payback period of 25 years. Terms under the social mortgage are 50,000 manats at an annual rate of four percent with a payback period of 30 years. The initial payment under the social mortgage is 15 percent, whilst the conventional loan is 20 percent.

Conditions of mortgage lending are as follows. Loans must be issued in Azerbaijani manats and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house. The volume of mortgage lending must not exceed 80 percent of the market price and the monthly payment must not exceed 70 percent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.

Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs and those making special contributions to sport as well as to the military with at least a three-year service term. Each family having the right to such a mortgage can only use the opportunity once.

There are 31 authorized banks belonging to the Mortgage Fund. Around 21 insurance companies and 11 appraisal organizations are participants of the mortgage market.

The official exchange rate is 0,7843 AZN/USD on July 22.

edited by CN