Azerbaijan, Baku / Trend corr U. Ismayilova / A rise in interest rate for mortgage crediting in 2008 is inevitable, the Chairman of the Managing Board of the National Bank of Azerbaijan Elman Rustamov said on 12 December.
"Interest rates of mortgage crediting will be managed according to the regulations of the market," Rustamov said.
Interest rates for social mortgage crediting in Azerbaijan in the period of operation of the Mortgage Fund (2006-2007) made up 4%, and the interest rate for the credits allotted by the local banks through the Mortgage Fund comprised 8%.
According to Rustamov, interest rates on social mortgage in 2008 will remain unchanged.
Presently, the negotiations for drawing foreign financing are on-going with the International Finance Corporation, the German Development Bank KfW and other interested large commercial banks in order to enable development and restoration of activities of the Azerbaijani Mortgage Fund, Rustamov said, but did not specify the amount of foreign financing.
During the operation of the Azerbaijani Mortgage Fund, local banks allocated credits through the Fund in the sum of AZN 260mln. A total of 8,000 mortgage credits were allotted, with 1,800 of them financed by the State and 6,200 by banks.
The Azerbaijani Mortgage Fund suspended its activities in summer due to lack of funds. The public budget-2006 allocated AZN 25mln to the Fund, and the public budget-2007 - AZN 20mln. AZN 35mln was envisaged in the approved Azerbaijani public budget-2008 for financing of mortgage crediting.