Azerbaijan, Baku, Feb. 3 / Trend I.Khalilova/
The German development bank KfW is negotiating with the Azerbaijani government to issue the third loan worth 5 million euro to support small and medium entrepreneurship (SME) in the country.
The bank offered to allocate funds to finance SME not via the German-Azerbaijani Fund (GAF), KfW Baku Office's Head Natig Abdullayev said on Feb. 3.
The head of the bank's office did not make essence of proposal public.
Earlier it was planned to allocate the funds via the GAF as previous two loans, but the bank was offered to direct the funds to the National Entrepreneurship Support Fund (NESF) at the Ministry of Economic Development.
The GAF finances nine banks, while the NESP has 29 authorized loan bodies.
"But use of the third loan via the National Fund is not discussed, because at present technical assistance is needed which under KfW's policy, cannot be rendered without further loan support," Abdullayev said.
Earlier, KfW offered Azerbaijan to issue consolidated loan worth 20 million euro to develop entrepreneurship. It was planned to issue 5 million of them under liberal conditions via the bank for 40 years with 10 years delay of payment and under 0.75 percent of interest rates. The remained loan (15 million euro) should be borrowed from KfW on capital market and its conditions were commercial. The Azerbaijani government refused from commercial part of loan without reaching an agreement to get lax ones.
The German bank has issued two tranches worth 8.7 million euro to the GAF since 1999. At they have been used and banks are being financed from revolving account and the fund's income which the GAF has gained since early its activity.
The GAF's partners comprise Bank of Baku and UniBank since March 2001, Para Bank and Bank Respublika since January 2003, Azerdemiryolbank and AG Bank since September 2004, Rabita Bank and Mugan Bank since December 2006 and Nikoil Bank since February 2007.
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