Azerbaijan, Baku, Feb. 9 / Trend N.Ismayilova /
On Monday, Azerbaijani President Ilham Aliyev signed a decree to use the law "Non-bank credit organizations", which came into force on December 25, 2009, the official press said.
The Cabinet of Ministers is charged to prepare and submit proposals to the President to bring the legislative acts into conformity with the law "Non-bank credit organizations"
The President must be also informed of bringing the law regulations of the Cabinet of Ministers and the relevant bodies of the central executive power in conformity with the law.
The law aims to enhance access of the population, mainly in the regions, to financial resources, small entrepreneurship support, reduction of poverty and strengthening the legal base of NBCOs, as well as support for the microfinance sector.
The law envisages creation of two types of NBCOs - having the right to receive a pawn deposit loan while granting loan and without this right.
License of NBCOs must include a permission to conduct activity with a right to draw pawn deposits. Otherwise, it is forbidden for these institutions to draw pawn deposits.
Licenses will be given to NBCOs on a termless basis. NBCOs can also open their branches and offices. But offices with the right to receive pawn deposits can be opened with the permission of the Central Bank.
NBCOs may issue secured and unsecured loans; the borrower's movable and immovable property may be security for the organization.
Non-profit credit organizations, which can operate only in the form of fund, will not have access to the NBCO. NBCO may be established by international organizations from countries that have agreements with Azerbaijan, and such funds may not engage in commercial activities. Today, the investors are interested in the establishment of a credit institution in the country. However, they expect the adoption of a law that would lay the legal basis for the activities NBCO.
NBCO may allocate loans through its own capital or funds borrowed from the financial institutions.
According to the law, all existing NBCO will have to apply international accounting standards, implement corporate governance standards. In addition, they will have an access to the credit bureau, acting under the Central Bank since 2005.
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