...

Global crisis downs German-Azerbaijani Fund turnover

Business Materials 5 February 2009 18:22 (UTC +04:00)

Azerbaijan, Baku, Feb. 5 / Trend , I.Khalilova/

The German-Azerbaijani Fund (GAF) does not expect new loans and will continue funding of banks through earnings, i.e., revolving accounts, in 2009, GAF technical manager Andreas Franke said on Feb. 5.

"The global financial crisis as a whole has not led to changes in the GAF activities. Only because of reduction in total lending in the banking system of Azerbaijan, GAF turnover has been declining since mid-2008," said Franke.

According to Franke, banks refused to invest in the German-Azerbaijani Fund. Therefore, GAF has to provide financing through revolving fund. As a result, GAF urges banks not to reduce the content of an account which received a regular GAF loan to below 85 percent. This account must be replenished through bank's own funds.

Other international organizations' loan resources issued to banks may be distributed through the GAF. However, this mechanism is currently not yet developed, so GAF's capacity is limited to loans of the German Development Bank KfW and the EBRD.

GAF started financing through a KfW loan in 2001. German bank allotted 8.7 million euros. Utilization of the funds and EBRD loan has been completed and funding of local banks is carried out through revolving account. EBRD joined financing banks through GAF as part of Azerbaijan Multi Bank Framework Facility Project for micro- and small-sized enterprises (AMBF-MSE) in 2006.

GAF current portfolio is 76 million euro under 15,350 loans. A total of 4,830 loans totaling 11.5 million euro were issued last year.

Agreement to establish GAF was signed in 1999. GAF started issuing loans in March 2001. GAF partners are Bank of Baku and UniBank (from March 2001), Parabank and Bank Respublika (from January 2003), Azerdemiryolbank and AGbank (from September 2004), Rabita Bank and Mugan Bank (from December 2006), and Nikoil Bank (from February 2007).

On Feb. 5, the official exchange rate is 0.808 manat to $1.

Do you have any feedback? Contact our journalist at [email protected]



Latest

Latest