Azerbaijan not to toughen mortgage loaning conditions
Azerbaijan, Baku, Feb. 27 / Trend , I.Khalilova/
The Azerbaijani government is holding consultations to resume mortgage loaning via the Azerbaijan Mortgage Fund (AMF) which functions at the National Bank of Azerbaijan (NBA), NBA Board Chairman Elman Rustamov said on Feb. 27.
"At present a mortgage instrument, as well as fields connected with construction market are too important to maintain business activity in the country and provide employment," Rustamov said. "Therefore, we must maintain activity by every means and to resume mortgage can play an important role in this case."
There are high enough proposals on the market at the moment, he said. Mortgage mechanism will enable to prevent stagnation on the construction market, as well as to continue to build houses which have already begun, Rustamov added.
A key mechanism of mortgage is the AMF's issuing securities. In this regard, the National Bank held meeting with relevant bodies.
"Their emission bases on legislation and the National Bank is prepared to guarantee these mortgage papers," Rustamov said. "They will be reached to a level of the guaranteed securities which will provide their liquidity on the market and, respectively will lead to activate the mortgage market."
So far, the Mortgage Fund has deposited roughly 65 million manats and securities can be issued at just this amount. The NBA head thinks it will expand and revive the country's stock market.
Rustamov said that they will not change interest rates on mortgage loans.
"One of principles to commercialize mortgage is to change rates. But we reconsidered our position under the current situation and do not plan to change interest rates," Rustamov said. "It will be necessary to simplify conditions for mortgage loan borrowers due to the world processes."
Loan must be issued to debtors with stable income, as the global crisis began from the mortgage market, he said.
So far, the AMF has refinanced mortgage loans worth 63 million manats issued by the authorized banks. This figure comprises 93 percent of total amount of the mortgage portfolio. Banks issued mortgage loans worth 67.9 million manats from March 2006 to June 2007, when the AMF conducted active operations to finance purchasing houses.
The Azerbaijani public budget envisaged 80 million manats to finance loans via the AMF from 2005 to 2008. Some 68 million manats of them has been issued.
A total of 14.5 million manats was deposited in public budget to finance social mortgage in 2009.
On Feb. 27, the official exchange rate is 0.8052 manat to $1.
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