Credit-Guarantee Fund defines first KfW guarantee receiver in Azerbaijan
Azerbaijan, Baku, Jan.17 / Trend I. Khalilova /
Credit-Guarantee Fund, acting in Azerbaijan, may provide the first guarantee to AGbank on attracting credit resources in international markets under the German bank KfW's funding terms, KfW Baku office said today.
"At present, the fund received appeal only from AGbank, who plans to get a guarantee for a credit line from the German bank Commerz Bank," KfW said.
An assessment has already been conducted in AGbank. But Andreas Franke, technical manager of the German-Azerbaijan Fund (GAF), refused to say the date of the deal's achievement. In this process, he said, delays were observed because of the global financial crisis, as foreign banks were not ready to provide credit lines.
According to him, the guarantee can be given to a partner bank of the German-Azerbaijan 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 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 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.
The guarantee of the credit guarantee fund can be given in 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.