BAKU, Azerbaijan, March 3
By Fidan Babayeva – Trend:
The non-bank credit organizations operating in Azerbaijan attracted loans in the form of debt, Chairman of the Azerbaijan Microfinance Association Jalal Aliyev told Trend.
“After 2015, the volume of investments has greatly decreased,” the chairman said. “There are several reasons. First, credit activity has declined. Secondly, credit institutions are mainly aimed at solving the problem of toxic assets. The third important issue is that loans which are offered by foreign investors are in major currencies (mostly in US dollars and euros).”
"The main goal of creating the non-bank credit organizations in Azerbaijan has traditionally been the financing of activity to create self-employment and jobs, that is, today it is the issuance of loans to the small and partially medium-sized enterprises," the chairman said.
“Neither non-bank credit organizations are interested in lending in foreign currency in Azerbaijan, nor potential borrowers want to borrow funds in foreign currency as instruments for insuring currency risks are expensive or even limited,” Aliyev added. “Another reason is that credit organizations currently operating in Azerbaijan have high liquidity.”
“Presently, there is no very high demand for foreign investments in ICT,” Aliyev added. “But the ICT sector plans to recover and expand in the near future.”
"The demand for foreign investments is expected to increase in 2020,” Aliyev said. “Reforms and innovations carried out previously by the Ministry of Taxes and the Ministry of Economy in the tax system, transparency of entrepreneurs' income will accelerate the issuance and increase the volume of business loans."
President of Azerbaijan Ilham Aliyev signed the decree on additional measures in connection with the solution of the issue related to the problem loans for individuals in 2019.
The decree envisages the payment of compensation to the citizens whose credit burden increased as a result of the devaluation of the manat in February and December 2015.
The decree also creates the opportunities for restructuring on concessional terms of both US dollar and manat loans overdue for more than 360 days.