Azerbaijan, Baku, May 7 / Trend , N.Ismayilova/
The Central bank of Azerbaijan (CBA) is designing proposals on introduction of innovation to the support of real sector, CBA Chairman Elman Rustamov said.
"The mortgage system is expected to be commenced," Rustamov said.
The mortgage will be financed not only through budget funds, but also through funds of the domestic securities market.
"We believe that this is a longer model. Azerbaijani banks have adequate liquidity and produce guaranteed securities. We want to finance the mortgage system by these means," he said.
Rates of mortgage credits will not be changed.
CBA is designing a mortgage obligations draft through technical assistance of the International Finance Corporation (IFC).
A total of 14.5 million manats were allocated from the 2009-Pulic budget to finance the social mortgage.
Mortgage lending was commenced by standards of the Azerbaijan Mortgage Fund (AIF), operating under the Central Bank of Azerbaijan, on March 25, 2006. The issue of social mortgage was launched since Feb.7, 2007. Demand for mortgages exceeded the budget provision, and from mid-June 2007, the AIF has ceased funding for mortgage loans. Fund received 46 million manats from the Public budget in 2005-2007, 34 million manats in 2008, out of which 22 million manats were allocated through two tranche. The portfolio of loans (1800) on AIF standards is 67.8 million manats with a total mortgage portfolio of banks amounting to 250-300 million manats.
Rates ranging from 8 percent (AIF standards) to 18-20 percent from commercial banks, term - from 10 to 25 years. Bank's agents are 23 stock banks.
AIF intends to resume mortgage lending. Currently, the German Academy of Banks is developing a strategy for its future activities, which will be presented to the Central Bank in November.
AIF applies subsidized mortgage model, which limits the mortgage finance resource. To enhance the capacity and raise additional funds above fund will be established a model for commercial mortgage lending.
After suspension of AIF's lending, commercial banks have been actively involved in the mortgage external borrowing, but the activity has decreased due to global financial crisis. Texnika Bank received the first loan from the Black Sea Trade and Development Bank of $8 million in 2007. In 2008, IFC has provided financing to UniBank $15 million, and the second credit line of $ 5million - Azerdemiryolbank. IFC is considering providing mortgage even for a single bank up to the end of the year.
On May 7, the official exchange rate is 0.8036 manat to $1.
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