Azerbaijan to Develop Measures to Restore Mortgage Lending - Minister

Business Materials 10 May 2008 11:44 (UTC +04:00)
Azerbaijan to Develop Measures to Restore Mortgage Lending - Minister

Azerbaijan, Baku, 10 May / Trend corr. U.Ismayilova / Samir Sharifov, Minister of Finance of Azerbaijan, stated that the Azerbaijani government would render support to local commercial banks and allocate the long-term mortgage lending.

"The government will take any measures to restore allocation of lending via the Azerbaijani Mortgage Fund and will support banks continue the process," the Minister said.

The Azerbaijani Mortgage Fund at the National Bank stopped issue of mortgage lending due to shortcomings of the funds in summer 2007. In 2006, some AZN 25mln was allocated from the State Budget to the Fund, as well as AZN 20mln - in 2007. By the approved State Budget for 2008, AZN 35mln was allocated to finance the mortgage lending.

Many Azerbaijani commercial banks are currently issue mortgage lending in compliance with their own program.

According to the Minister, the one problem that the Fund faces is shortcomings of the funds.

Presently, National Bank holds negotiations with International Finance Corporation, German KfW and other largest commercial banks to draw funds to develop and restore issue of mortgage lending by Fund.

"The credits of the Fund will be issued for 10 or 20 years term," Sharifov stated.

The local banks, according to the Minister, are not able to issue such long-term lending. For this purpose the government takes all the necessary measures to promote the activity of commercial banks in this direction.

"Azerbaijani Mortgage Fund will restore issue of mortgage lending from the second half of 2008," the Minister said.

Since beginning of the activity the Azerbaijani Mortgage Fund has allocated AZN 260mln to local banks. Totally there were issued AZN 8,000 mortgage lending with AZN 1,800 by State and AZN 6,200 by banks.

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