German-Azerbaijani Fund to Provide Agro Credits
Azerbaijan, Baku, 28 August /corr. Trend I.Khalilova / German-Azerbaijani Fund (GAF) will increase the sphere of activity and commence providing agro-credits in line with the European Bank for Reconstruction and Development (EBRD), technical manager of GAF, Andreas Franck, said on 28 August.
"By the beginning of the next year, we want to increase the portfolio of agro-crediting up to 10% of the gross amount of issued credits," Franck said.
According to him, primary attention will be paid to the crediting of the production of seasonal agricultural products. In addition, the conditions of granting agro-credits will depend on the banks, through which they will be given, and the regions. As needed, the interest rates on the credits can be cheaper than commercial credits (rate varies in the range of 25-36 percent annually). But as a whole, taking into account the high risks of financing agriculture, the interest rates on the agro-credits must be automatically high, Franck said. The term of credits for agro-financing is expected to be three years.
The EBRD joined the financing of the banks via GAF within the mechanism of common framework of financial services for micro and small entrepreneurship in Azerbaijan (AMBF-MSE).
Currently the portfolio of GAF totals $62mln, from which $15mln have formed as a result of credits from KFW, and remaining $47mln falls on EBRD. In general, up to now, nearly18,000 credits have been given, with 5-6,000 in line with the German bank.
Agreement on establishment of GAF was signed in 1999, but providing credits began from March 2001. Partners to GAF are Bank of Baku and UniBank (from March 2001), from January 2003 - Parabank and Bank Respublika, from September 2004 - Azerdemiryolbank and Azerigazbank, from December 2006 - Rabitabank and Muganbank, from February 2007 - Nikoil Bank.
The official exchange rate on 28 August is 0.8132 AZN/USD.
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