BSBTD Searches Possibility to Finance Development of Infrastructure of Azerbaijan’s Financial Sector

Business Materials 16 October 2007 16:30

Azerbaijan, Baku /corr. Trend I.Khalilova / The Black Sea Bank for Trade and Development (BSBTD) is considering the possibility to co-operate with the Credit Guarantee Fund of Azerbaijan established through technical assistance of the German Development Bank KFW, a source stated at the Ministry of Economic Development of Azerbaijan. These plans of the Black Sea Bank have been specified in its co-operation strategy with Azerbaijan for 2007-2010.

Currently KFW determines the consultant for the Credit Guarantee Fund of Azerbaijan. Possibly the German Savings Bank Foundation for International Cooperation (SBFIC) will be as consultant for the Credit Guarantee Fund of Azerbaijan. The Foundation has experience in this regard in Georgia and Armenia.

KFW has approved €4 mln for the realization of the project, with €3.75mln as guarantee for the establishment of the Fund and €0.25mln for payment of consultation services. The Fund will function as accountant in KFW's headquarters. In the event of appeals from Azerbaijani banks, the Fund will inspect them and appeal to KFW for a guarantee. The conception envisages selecting new Fund agent-banks, but does not exclude participation of German-Azerbaijani Fund partner-banks and Micro Finance Bank of Azerbaijan.

Azerbaijani banks may borrow from international banks on the basis of credit terms of KFW who possess AAA+ rating. In the first stage, the amount of the Fund will total €2.3 mln. The Credit Guarantee Fund has no limitations in attracting credit lines, but in the first stage, the amount of the guarantee will not exceed €500,000. Whilst attracting KFW guarantees, the banks cannot give loans exceeding €150,000.

In addition, the BSBTD intends to investigate other financing possibilities to develop the infrastructure of the financial sector of Azerbaijan.