KfW may provide Azerbaijani banking sector with first guarantee in early 2011
Azerbaijan, Baku, Dec. 24 / Trend N. Ismayilova /
The credit guarantee fund may provide the first guarantee to the Azerbaijani bank to draw credit resources on international markets under the lending of German development bank KfW in early 2011, Andreas Franke, technical manager of the German-Azerbaijan Fund (GAF), said.
"The banks were not ready for giving credit lines because of the global financial crisis. But the fund is holding the negotiations now. But it is possible to provide the first guarantee in 2011, Franke said.
The guarantee can be given to one of the partner banks of the credit guarantee fund - Bank of Baku, Bank Respublika, UniBank, Para Bank, Demirbank and AGbank. The main condition is that funds drawn under the fund's guarantee must be directed to develop small and medium business in the business scheme of the credit guarantee fund, or the banks must form the portfolio to the same amount allocated to this sector.
The guarantee of the credit guarantee fund can be given to the amount of up to 90 percent of the amount of the loan. The remaining 10 percent will be under the bank's own risk.
KFW has approved €4 mln for the realization of the project, with €3.75mln as guarantee for the establishment of the Fund and €0.25mln for payment of consultation services. The rest funds were transferred to the fund by the Azerbaijani government.