IFC to Assist Azerbaijan in Devising a New System of Mortgage Crediting and Program on Securitization
Azerbaijan, Baku /corr Trend I.Khalilova / The International Finance Corporation (IFC) will assist Azerbaijan Mortgage Fund (AMF) of National Bank of Azerbaijan in devising a new mortgage crediting system and a program on securitization in Azerbaijan, said the Head of IFC Project for Initial Mortgage Crediting Market in Central Asia, Santiago Ruiz-Morales.
Currently the AMF applies subsided mortgages which limit mortgage financing. The Fund needs to introduce commercial mortgage crediting to expand the opportunities and attract additional finances.
Morales considers that it is possible to give mortgage crediting commercially and within a social mortgage program. "Such practice is being applied in other countries as well, but the social mortgage is provided by separate structures of the Mortgage Funds," the consultant said.
Amongst five countries named in the IFC project, currently Kazakhstan has mostly advanced in the mortgage crediting. The mortgage credits in Azerbaijan are being given via AMF, of which finances have been completed today.
According to Morales, while introducing the new model, Azerbaijan should not utilise the practice of these countries because Kazakhstan faced problems due to the worldwide mortgage crediting. It happened due to the Kazakh banks having given mortgage credits for a long-term period although these funds were borrowed for a short-term period. As a result of the crisis, the foreign investors refuse to provide additional finances. "Therefore, Azerbaijan should not repeat these mistakes and should try to improve on them," the consultant said.
According to him, giving mortgage credits in Azerbaijani banks via securitization will be possible after the adoption of a program at State level.
The measures to improve the legislation and increase the institutional potential of AMF are being implemented within the 2nd stage of IFC technical assistance program. The project is financed by the State Secretariat for Economic Affairs.