Azerbaijan, Baku, Jan. 14 / Trend I.Khalilova /
The German Savings Banks Foundation for International Cooperation (SBFIC) has allocated technical assistance worth 250,000 euro to promote the activities of the Credit Guarantee Fund in Azerbaijan, the Baku office of the German Development Bank KfW said on Friday.
"These funds are provided for related activities, including seminars, research, evaluation and advising," the office reported.
The SBFIC and the Azerbaijani Finance Ministry have already signed a contract.
In August 2008, the KfW signed a contract with Azerbaijan's Economic Development Ministry to to find a local consultant and act as a project manager. However, in the period, no guarantees had yet been provided on foreign loans attracted by local banks. At the same time, the global crisis led to increased costs on foreign bank lending resources financing progressive markets.
The fund will cooperate as an accountant at the KfW headquarters. The consultant will monitor Azerbaijani banks and act as a guarantee before the KfW.
The guarantee can be given to a partner bank of the German-Azerbaijani Fund (GAF) for Small and Medium Business, such as the Bank of Baku, Bank Respublika, UniBank, Para Bank, Demirbank and AGbank. The GAF's main condition is that the attracted funds be directed to the development of small- and medium-sized enterprises in the GAF business scheme, or banks will have to generate the same amount of portfolio allocated to this sector.
The KfW rendered Azerbaijan 4 million euro for the establishment of the fund, 3.75 million of which will be used as guarantees and 0.25 million of which will be used as payments to the consultant. The remaining funds are provided by the Azerbaijani government.