Azerbaijan, Baku, 4 April / Trend corr I. Khalilova/ On 4 April, Azerbaijan's commercial UniBank and the International Financial Corporation (IFC) signed an agreement on allocation of a long-term credit in the sum of $15mln for mortgage crediting. The project gave momentum to the implementation of IFC Housing Finance program in Azerbaijan, the IFC Vice-President for Europe and Central Asia Declan Duff stated at the signing ceremony.
"Launching of the mortgage program was possible only because of the acceleration in development of the mortgage market in Azerbaijan. IFC intends to support the country with long-term funds for the expansion of housing opportunities," Duff said.
According to Duff, the agreement will also improve the relationships between UniBank and IFC.
UniBank was the first to receive a credit from IFC for housing. That will be the first but not the least foreign financing for mortgage crediting, UniBank's First Deputy Chairman of the Board Kamil Seyidov said.
The funds of the IFC have been allocated within the Housing Finance program in Azerbaijan. The Housing Finance program includes ensuring long-term mortgage crediting and rendering consultation services. The loan to UniBank was provided for a period of seven years. The sides did not disclose the interest rates.
According to Seyidov, the loan will be spent in accordance with the conditions of the own mortgage program of UniBank. The mortgage credits for a period of 15 years will be allocated with 17% interest rate, more than 10 years - 18%, and for shorter period, the rates will be higher. He considers that the rates for the mortgage credits changed due to the situation in the world financial markets. In addition, the bank requires insuring mortgage security. To prevent the risks, UniBank requires the borrower to insure his/her labour ability and life. It is voluntary up to $70,000, but if more, it is obligatory.
The maximal amount of the credit totals $150,000 and minimal - $15,000.
At present, the mortgage portfolio of UniBank, being formed at the expense of Azerbaijan Mortgage Fund, totalled AZN 4.5mln. and own mortgage portfolio - 28% from the gross retail-portfolio (50% of the aggregated credit portfolio). The credit portfolio of the bank totals AZN 320mln.
UniBank, with its assets comprising $375mln, is one of the leaders among Azerbaijan's private commercial banks.
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