Azerbaijan, Baku, Aug. 20 / Trend , I.Khalilova/
In 2009, Azerbaijani AccessBank is planning to pay off $20 million in external loans borrowed from international financial institutions to develop the country's micro and small businesses, the bank's General Manager, Andrew Pospielovsky, said.
"The total amount of external borrowing for the bank now stands at $187 million and the bank is in a liquidity position," said Pospielovsky. "We do not yet see the need to expand a portfolio of loans from foreign sources, because an increase of over 100-percent in the bank's deposit base over seven months has allowed us to continue lending operations with internal resources."
AccessBank's deposit portfolio exceeded $50 million in late July.
"In the current situation, while there is a slight lull in the country's economic development, such a growth of deposits increases the our risks, so we are going to pay more attention to risk management. This risk management should be on a backdrop of increasing demand for lending by Azerbaijani business," said Pospielovsky.
He also does not consider it necessary to increase the loan portfolio, due to the fact that the bank has a credit agreement, the resources of which have not yet been fully used. So far, only a half of a $30-million syndicated loan issued by the European Bank for Reconstruction and Development (EBRD) has been received. Loans from the International Finance Corporation ( $15 million) and the International Finance Facility OFID (The OPEC Fund for International Development - Foundation for International Development is working with OPEK - Organization of Petroleum Exporting Countries) worth $5 million still remain fully used.
In addition, AccessBank has signed a loan agreement with the Dutch pension fund SNS, but the bank's head did not disclose the amount of the loan due to continuing legal issues.
Although the global financial crisis has meant access to foreign loans is restricted and investors' approach to borrowers on emerging markets is more selective, AccessBank has not yet been faced with problems in drawing funds. On the other hand, funding really went up in price and has become more conservative in long term borrowing.
However, the bank, which was founded by six international financial institutions, has a positive image and now a rating in Fitch Ratings, allowing the bank both to find investors, and also set the cost of borrowing no higher than it was in 2007.
In 2008, Fitch Ratings identified AccessBank's long-term issuer default rating at the level "BB +", which is the highest among private financial institutions in Azerbaijan. In April 2009, the Agency confirmed the assessment at this level, since the bank's rating cannot be higher than the sovereign rating (of the country), but its next update is expected to take place by late 2009, said Pospielovsky.
AccessBank is owned by six shareholders, which are the European Bank for Reconstruction and Development, the International Finance Corporation, the Black Sea Trade and Development Bank, KfW Development Bank - the Development Bank of the German Government (20% each), Access Microfinance Holding - a strategic microfinance investor (16.5%), and LFS Financial Systems - a German consulting company (3.5%).
AccessBank is a leading creditor for micro and small businesses in Azerbaijan, monthly issuing over 4,000 business loans worth more than $20 million. In late July, the bank's loan portfolio exceeded $250 million with a 25-percent increase compared to early 2009.
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