Azerbaijan, Baku, April 25 /Trend, I.Khalilova/
German development bank KfW examines the possibility of assigning its third agro-financing loan to Azerbaijani Turanbank under the project of agro-financing of rural localities in Azerbaijan, the KfW Baku Office reported on Monday.
"Assessment has already been conducted at Turanbank, which, as a bank having the experience of work in rural localities, is the potential pretender for 1.5 million euro-worth loan from KfW," KfW reported.
Basic requirements for the selection of pretenders for a loan under this project "include developed network of regional branches, trained personnel, etc.
"On his recent visit to the country, KfW Manager for Financial Projects Herald Higner held a meeting at this bank," the KfW Baku Office reported. However, the Office declined to report the exact date of conclusion of a contract with Turanbank.
The cost of the first phase of the project is five million euros, of which 3.5 million euros has already been allocated. For the distribution of the remaining 1.5 million euros, KfW has selected Azerbaijani Bank of Baku, which has already been evaluated, and today it is the most potential candidate for a loan from KfW. The issue of signing the contract will also be discussed during German bank manager's visit to Azerbaijan.
Loans were distributed between two credit agencies - Bank Respublika and non-bank credit organization CredAgro. Bank Respublika received 1.5 million euro, while 2 million has been allocated to CredAgro.
At the moment, KfW also explores the opportunity of prolonging the project of agro-financing of rural areas in Azerbaijan. The bank plans to assign 3 million euro to the country for the financing of the project's second phase.
The KfW Baku Office does not rule out that the project's second phase will begin this year.
This money, like that assigned under the first phase will be assigned as subordinated loans. Though such loans are provided as second-level capital, they will be designing for the financing of rural population in regions.
The terms of the loans are similar to that of the financing of banks through the Germany-Azerbaijani Fund.
The first agreement was signed with CredAgro. CredAgro specializes in its activity on agro-financing, in difference to banks. 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, and consumer loaning except for mortgage.
Bank Respublika started operating in 1992. The bank has 34 branches and units in Baku and the regions.
The number of the bank's shareholders includes Germany's two large financial organizations: DEG, a member of the KfW banking group, and SIDT, a member of Sparkassen-Finanzgruppe holding 25 percent plus one share of the bank's interest.
Turanbank was established in 1992. It has 25 shareholders, including 5 legal entities (21.8 percent) and 20 physical persons (78.2 percent).