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German Bank to Extend its Resources for Azerbaijani Banks

Business Materials 5 August 2008 16:59 (UTC +04:00)

Azerbaijan, Baku, 5 August / Trend corr. I.Khalilova / The German development bank KfW will increase the direct financing volume of Azerbaijani banks, Natik Abdullayev, the Head of KfW Baku Office reported.

In the first stage KfW has allocated €6mln for agrarian financing in rural. These funds will be distributed via the Bank Respublika, Azerdemiryolbank and non-bank loan organization CredAgro,. Each organization will allocate €2mln. However, the credit deal has already been reached only with CredAgro.

"Three or four banks will have access to KfW resources in the future," Abdullayev said.

German bank started direct financing of local banks after the Azerbaijani Government refused from the third tranche in the sum of €20mln for the German - Azerbaijani fund to support small-scale and mid-scale entrepreneurship. Some €5mln was allocated on the privileged conditions, but €15mln from KfW own fund.

"We plan to allocate funds to develop rural in Azerbaijan, and the chosen banks have extended branch network in regions," Abdullayev said.

KfW is to allocate funds as subordinated loan. Although, such loan is invested into the second level capital, bank's funds will be directed crediting rural in regions. The first stage will cover Shaki- Zagatala and Gakh rural.

On 5 August, the official currency rate is 0,8096 AZN/USD.

The correspondent can be contacted at:[email protected]

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