IFC Allocates Another Credit to Finance Mortgage and Leasing Operations
Azerbaijan, Baku, 28 June / Trend corr. I.Khalilova / The Council of Directors of the International Financial Corporation (IFC) approved allocation of $10mln to Azdemiryolbank to finance mortgage and leasing operations, IFC said.
Some $5mln for seven years period was allocated to support the mortgage programs, as well as $5mln for five years period to support leasing projects in small-scale and medium-scale business.
Within the framework of IFC mortgage program - Housing Finance, which includes providing of longstanding mortgage financing and rendering consulting services and it, will be the second transaction. The first credit $15mln for seven years period was allocated to UniBank in March 2008.
According to Aliya Azimova, IFC representative in Azerbaijan, the financial corporation is planning to finance dwelling in Azerbaijan ($30 or $35mln). Azimova believes that these funds will cover three of four banks.
At present, the mortgage market in Azerbaijan makes up $150mln.
Financing of leasing operations is being implemented within the framework of the program to support leasing in Azerbaijan and Central Asia. Since 2005, the program is directed to render technical assistance to Uni Leasing, AG Leasing and Bank of Baku, although it renders consultations to other leasing companies as well. Uni Leasing has become the first company in Azerbaijan to receive credit from the corporation $5mln. The second credit $1mln was allocated to AG Leasing through AzerigazBank.
The low capitalization rate in Azerbaijan's leasing sector does not allow increasing of IFC financings. Leasing companies' capital totals average $1mln. IFC can finance 60% of the joint capital (without subordinated credits, which are taken into consideration in the capital of the second rate). For this reason the Leasing Financing Fund with $30mln capital has allocated $11mln to Azerbaijani leasing companies.
On 27 June, the official currency rate was 0,8128 AZN/USD.
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