KfW to provide third soft loan to Azerbaijan in national currency

Business Materials 27 September 2011 22:16 (UTC +04:00)

Azerbaijan, Baku, Sept. 27 /Trend, N.Ismayilova/

German Development Bank KfW will provide the third soft loan worth five million euros to support small and medium enterprises (SMEs) in Azerbaijan in manat, financial projects manager at KfW Herald Hyugner said to a press conference on Tuesday.

"The Bank intends to provide the credit in national currency of Azerbaijan and assume the risk of exchange rate," said Hyugner.

He said the current portfolio of the German-Azerbaijan Fund (GAF), through which the German bank's funds are spent on SME support, reaches 11.5 million euros.

Like the previous two loans, KfW will provide the third loan also on preferential terms - 40 years with a 10-year grace period at an annual rate of 0.75 percent.

These funds as the first two loans are designed for funding SMEs through German-Azerbaijani Fund (GAF).

Since 1999, the bank has provided two tranches of 8.7 million euro to GAF.

Since the beginning of its activity, German-Azerbaijan Fund financed 30,000 loans worth more than 110 million euro in total at the expense of own funds. At present, the fund's activity covers 16 regions, where 36 service points operate.

GAF partners are the Bank of Baku and Unibank, Parabank and Bank Respublika, DemirBank and AGbank, Rabita Bank and Mugan Bank and Nikoil Bank.
However, it is not excluded that the list can be expanded within the third loan.