Details added (first version posted on 15:58)
Baku, Azerbaijan, Feb. 4
By Azad Hasanli - Trend:
Creation of a movable property registry and private credit bureau is very important for supporting small and medium-sized businesses and ensuring economic growth of Azerbaijan, President of the country's Association of Banks Zakir Nuriyev said.
He made the remarks Feb. 4 at an event dedicated to the beginning of the third stage of the IFC Azerbaijan-Central Asia Financial Markets Infrastructure Advisory Services Project.
"This project has continued for a long time, and we hope that its final stage will be completed successfully," he said. "Banks, within their capabilities will also support this project. Both projects [movable property registry and private credit bureau] are quite important given the fact that the country has officially announced transition to post-oil economic model, and economic reforms are implemented namely in this direction."
He said that private credit bureau is especially important, given the fact that the market participants need a certain flow of information to finance small and medium enterprises (SMEs).
"The absence of necessary information and loan agreement preparation mechanism for SMEs, as well as for the registry of movable property limits the abilities [of SME financing]," he said. "Therefore, this project is very important for financial market's participants."
Creation of movable property registry is provided by the bill on secured transactions, which was prepared in 2008 by the ACDI-VOCA (Agricultural Cooperative Development International / Volunteers in Overseas Cooperative Assistance) international organization with the USAID (US Agency for International Development) assistance.
ACAFI (Azerbaijan-Central Asia Financial Markets Infrastructure) project proceeded to finalize the bill in 2010. The bill has been finalized jointly by IFC and USAID since 2010. Then the Central Bank of Azerbaijan joined the process.
The law will ensure the transparent rules for creditors and facilitate the use of personal property (various inventory, equipment, accounts receivable) as collateral, by increasing the profitability and maintaining the economic growth of Azerbaijan.
The bill envisages the creation of personal property registry. The personal property registry will affect the number of issued loans, especially to small and medium-sized businesses.
Azerbaijan started forming borrowers' credit history from 2005, following the creation of the Centralized Credit Registry under the Central Bank.
The registry covers the whole information about banks, non-bank credit institutions, borrowers, owners of large stocks in the capital of borrowers.
ACAFI project is aimed at improving the infrastructure of financial markets in Central Asia (Kyrgyzstan, Tajikistan and Uzbekistan) and Azerbaijan by creating an effective system for exchanging credit information and providing professional training and certification in the sphere of risk management among the employees of financial institutions.
The project will help financial institutions to take quicker and right credit decisions, thereby increasing the accessibility of financial services for individual consumers and small and medium enterprises in the region. This three-year project is being implemented in cooperation with the Swiss government.