Azerbaijan, Baku, Aug. 21 / corr Trend I.Khalilova /
The German Bank for Development KfW plans to allocate 3 million euros to Azerbaijan under the second phase of rural agrofinancing in Azerbaijan, KfW Baku office told Trend on Friday.
"The funds will be allocated as a subordinated loan, like in the first phase. Though such capital is included in the capital of the second level, the funds will assigned for lending agriculture in the regions," KfW said, but avoided to cite number of banks which will have an access to KfW's loans.
The first phase was valued at 5 million euros, which included lending and technical assistance.
KfW cooperates with Bank Respublika, Azerdemiryolbank and non bank loan organization CredAgro within agro financing project of villagers in Azerbaijan. But it was made a decision about technical aid because of little experience of banks in agricultural loaning
Loans were distributed between two credit agencies - Bank Respublika and non-banks credit organization CredAgro, while Demirbank received a technical aid. Bank Respublika received 1.5 million euro, whilst 2 million has been allocated to CredAgro. The rest of this sum was allocated for Demirbank, although is still delayed.
These funds may be allotted to another bank, or will be included into the second phase.
The first agreement was signed with CredAgro. CredAgro specializes in its activity on agro-financing, in difference to banks.
Sheki-Zagatal and Gakh will be covered at the first stage.
Terms of loans will be similar with terms of financing of banks via German-Azerbaijani fund.
CredAgro was established in 2000 by the international humanitarian organization ACDI-VOCA. The authorized capital of the organization hits $5,000 but joint capital - 7 million manat.
Presently, CredAgro is oriented on financing of projects in regions and covers 27 regions. It established 9 representations and has supporting offices. Spheres of loaning include agricultural loaning, financing of trade operations, infrastructure, leasing, consumer loaning except for mortgage.
DemirBank (formerly Azerdemiryolbank) has operated in Azerbaijan since October 1989. DemirBank developed within 18 years and strengthened its position on the Azerbaijani bank market. Its shareholders include large international financial institutions, such as the European Bank for Reconstruction and Development and the Netherlands Development Finance Company, with a DemirBank share of 25 percent + 1 share.
Presently, Azerdemiryolbank OJSC enters five biggest banks of the country and has 32 branches and departments covering Baku and regions.
Bank Respublika started operating in 1992. The bank has 33 branches and units in Baku and the regions.
The shareholders are two large German financial institutions DEG and SIDT, a member of Sparkassen-Finanzgruppe, with a Bank Respublika share package of 25 percent + 1 share.