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Azerbaijani Bank Prepares to Sign Loan Agreement with IFC to Finance Leasing

Business Materials 3 November 2008 17:44 (UTC +04:00)

Azerbaijan, Baku, 3 November / corr Trend I.Khalilova / "The International Finance Corporation (IFC) submitted to Azerdemiryolbank a draft agreement on a $5mln loan for leasing operations," Shahin Mirzayev, deputy CEO of the bank, said. Loan is granted for the term of 5 years.  

The deputy CEO of the bank did not exclude a probability of signing of an agreement during

the forthcoming visit of the mission of financial corporation to Baku at the beginning of November.

The loan pack, consisting of three loans in the amount of $15mln and intended for mortgage, leasing and trade financing, was approved at the Board of Directors of IDC in summer of 2008. The agreement on corporation's mortgage program was signed in August.

The Azerbaijani bank had to develop a new policy on realization of leasing operations in line with IFC requirements in Azerbaijan before conclusion of agreement on financing of leasing operations. Azerdemiryolbank launched leasing operations almost nine months ago.

Presently, the bank has own leasing program and inner procedures. The bank's leasing portfolio exceeds AZN 4mln.

Drawing in of IFC loan for leasing operations will entail rise in prices of interest rates. Presently, they totaled 21-22% depending on primary deposit and a sphere of business. In accordance with terms of IFC, juridical persons will have access to these operations, which are realized through the corporation's funds.

For the time being, Azerdemiryolbank does not intend to change the status of leasing department, as functioning legislation enables the bank to realize leasing operations. Azerdemiryolbank intends to consider the necessity of setting up a specialized company only after changes into tax legislation, as these changes are connected with the issue of economic expediency, influence of leasing operations on the bank's business activities and inner competition.

Exchange rate of US dollar was AZN 0.8087 on 3 November

The correspondent can be contacted at [email protected]

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