Azerbaijani Mortgage Fund to resume lending

Business Materials 16 February 2009 15:11 (UTC +04:00)

Azerbaijan, Baku, Feb. 16 / Trend , U.Ismayilova/ 

The Azerbaijani National Bank Mortgage Fund (AMF) will resume mortgage lending within a year, AMF Deputy Executive Director Mustafa Mammadov said on Feb. 16.

"The Azerbaijani Mortgage Fund has already submitted its proposals to relevant structures and the cabinet," Mammadov said.

Resuming mortgage lending is a government measures to combat the crisis, he said.

The AMF's proposals include improving mortgage lending standards, diversiying insurance portfolios among companies to prevent risks and restoring mortgage lending.

The AMF is expected to change its ownership structure into a joint stock company. The structure will instead be commercial, Mammadov said.

The AMF is considering opportunities to use 14.5 million manat allocated from the state budget for mortgage lending in 2009 to form its authorized capital.

"All steps are scheduled for this year," Mammadov said.

The National Bank of Azerbaijan (NBA) jointly with the government is developing a broader model of mortgage lending. The model envisages social and commercial mortgages, NBA Chairman Elman Rustamov said.

"Today, the mortgage instrument is very important to preserve business in the country and ensure employment," he added.

The AMF refinanced mortgage loans, issued by authorized banks, at 63.3 million manat, which is 93 percent of its total mortgage portfolio. From March 2006 to June 2007, AIF was actively financing housing purchases. Banks issued mortgage loans amounting to 67.9 million manat during that period.

A total of 80 million manat was allocatged to mortgage lending via the AMF in Azerbaijan's 2005-2008 state budgets. Some 68 million manat has already been allocated.

A total of 14.5 million manat was allocated to the 2009 state budget for mortgage lending.

The AMF suspended mortgage lending in summer 2007 due to a lack of funds.

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