IFC May Finance Azerbaijan Mortgage Fund After privatization
Azerbaijan, Baku, 22 October / Trend corr. I.Khalilova / The International Finance Corporation (IFC)recommends the Azerbaijani Mortgage Fund (AMF), which is operating under the National Bank of Azerbaijan, to attract foreign borrowings after the fund is transferred to private property," Garth Bedford, an expert of the International Finance Corporation (IFC) on mortgage crediting in Azerbaijan and the Central Asia, said.
"I expect that the fund's further operating strategy on the commercial ground, which is being worked out with IFC, will include AMF's privatization issue. We held several discussions on the issue. However, the issue on turning the mortgage fund into joint stock company still will be made by the Government," Bedford said.
This must become a positive step. "IFC will finance the mortgage fund in the case of its privatization," Bedford said.
IFC has signed a memorandum with the fund on cooperation intentions. The main accent in the document is made on commercialization of fund's activity, turning into joint stock company with further attraction of alternative finance sources and implementation of commercial business-plans. At present, a strategy is being worked out through assistance of IFC. The first version of the document will be submitted to Azerbaijan within a month.
By the memorandum with IFC, proposals are envisaged to develop to fund donors and attract consultants. At this stage the corporation plans to sign wider deal, where the details of the project will be agreed, and temporary frameworks to turn the fund into joint stock company.
The mortgage crediting on AMF standards was started on 25 March in 2006 and the social mortgage was launched on February. The mortgage credits demand exceeded the budget assignment, and beginning from mid of June, AMF stopped financing of mortgage crediting on its own standards. Fund received AZN 46mln from the state budget for 2005-2007 and will receive AZN 34mln in 2008. Some AZN 10mln out of the sum has already been allocated to refinance issued credits by bank. The credit portfolio on AMF standards make up AZN 67.8mln with the total mortgage portfolio of banks in the sum of AZN 250-300mln.
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