Azerbaijan intends to move to German model of mortgage lending
Azerbaijan, Baku, Jan.20 / Trend N. Ismayilova /
The Central Bank of Azerbaijan (CBA) sees a need for improving a model of mortgage lending applied in the country, CBA Chairman Elman Rustamov told journalists today.
"We see an urgent need to launch another model of mortgage lending. The existing mortgage model will be improved, and the so-called German model will be applied," Rustamov said.
According to him, a peculiarity of the new model will be the creation of the possibility of mortgage lending through the system of accumulation of population's deposits.
Rustamov said in the current year, as in 2010, 14 million manat have been allocated from the state budget for mortgage lending.
"The demand for social and commercial mortgage is high, and we together with government are looking for additional opportunities to expand the amount of housing funding," he said.
Rustamov said that the demand for mortgage loans in the country is particularly due to the activity of the construction sector.
"Volume of sales of housing, the release of the investments in this sector will depend on the development of the mortgage market, so that they again could be redirected to the development of non-oil sector," Rustamov said.
In 2010, through Azerbaijani Mortgage Fund (AMF), operating under the Central Bank loans amounting to 95.9 million manat were granted. Total amount of refinancing loans issued by banks earlier hit 90.5 million manat. Some 14 million manat was allocated from the state budget envisaged for 2010 for financing social mortgage. AMF mortgage bonds in the amount of 81 million manat was placed in 2010.
The official exchange rate is 0.7974 manat to $1 on January 20.