Central Bank of Azerbaijan can not forecast continuation of budget mortgage financing in 2010

Business Materials 24 June 2009 19:51 (UTC +04:00)

Azerbaijan, Baku, June 24 / Trend , N.Ismaylova /

The Central Bank of Azerbaijan find it difficult to predict continuation of funding from 2010 Public budget for the social mortgage, said the first deputy chairman of the Central Bank Alim Guliyev.

"Each year, funds from the Public budget to finance mortgages are reducing, said Guliyev. - But it is not surprising that in world practice, the mortgage funds should operate on self-finance principles".

According to him, the funds allocated from the Public budget are very limited, and of total 14 million manat in 2009, the Azerbaijan Mortgage Fund received only two million manat, while the number of people seeking mortgages is very high.

The 2009 Public budget provided 14 million manats to finance the social mortgage, and within commercial mortgage, bonds were issued in amount of 55 million manats, of which 15 million manat has already been posted. The mortgage lending in the country was resumed from June 1 and social mortgage from June 18.

Mortgage loaning began in accordance with standards of the fund in Azerbaijan on March 25, 2006. Granting of social mortgage began from February 7, 2007. Demand for mortgage loans exceeds budget assignment. The fund ceased financing of mortgage loans on its standards from middle of June 2007. The fund got 75 million manat from state budget over 2005-2009.

Rates on loans vary from 8 percent (according to standards of the fund) to 18-20 percent in commercial banks. Term is from 10 to 30 years. Agents of the fund are 17 banks. Maximal amount of loan obtained through the fund hits 50,000 manat for a term from 3 to 25 years.

Official rate on June 24 is 0.804 AZN/USD.

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