Azerbaijan, Baku, June 7 / Trend U.Ismayilova /
Eighty two percent of the residents of Baku use banking services, of them only 36 percent use credit services that confirms the continuation of this figure for a year without any changes, the International Research Group Business Insight (BI) reported.
"About 68 percent of bank revenues are formed at the expense of interest on loans in Azerbaijan," the report says.
The survey conducted among 734 respondents show that preference is given to consumer loans in the bank lending. However, the banks have problems with repayment under the influence of the global financial crisis.
"The studies show that before the crisis, incomes rose by 30 percent and consumer credit rose by 100 percent exceeding the population's income by three times. But, the global crisis raised problems regarding returning of the consumer loans."
About 5.4 percent of total loan portfolio accounted for overdue loans in 2009.
"The share of problem loans grows every day. Three years ago the proportion of problem loans in micro-loans comprised less than one percent, but now the figure is closer to five percent," the report says.
Based on the organizations' specialists, 44.8 percent of respondents linked overdue loans with low levels of material status of the population, 26 percent - an unexpected loss of employment, 25.8 percent - with a poor credit culture, to 6.8 percent - high bank interest, 3. 4 per cent - improper use of credit and 2.3 percent - think that they had not been fully informed about the credit system of the bank.
Based on the survey, 1.5 percent of respondents stated that to take loans is unwisely, one percent of respondents - the banks' loan conditions are strict, 0.5 percent - the conditions of bank lending is too simplified, 0.5 per cent - full information about the borrower is necessary and five per cent did not know the cause of education of troubled loans.
"In some cases, commercial banks observed the creation of "black credit market "," the survey says."The Central Bank needs to tighten rules for issuing consumer credit, oppose artificial increase in interest rates, strengthen the supervision to prevent the establishment of commercial banks' black credit market "and conduct educational work among the population to resolve this important issue."
Based on the CBA, the banks have issued 8605.5 million manat as of late April. The banks increased lending to the economy of Azerbaijan by 1.4 percent in April and by 38.3 percent compared to April 2009. Of the total portfolio of loans and advances 365.2 million manat fell to overdue loans compared to 355,9 million manat as of April 1, 200,8 million manat as of May 12009.
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