Azerbaijan, Baku, Oct. 27 /Trend, A.Akhundov/
Adopting the bill on movable property in Azerbaijan will expand the tax base for the country, the International Finance Corporation (IFC) Secured Transactions Specialist Everett Wohlers said in his speech at a conference on "The Role of the secured transactions and registry of movable property" which took place in Baku
"The adoption of the bill will increase the possibility of borrowers, especially small and medium enterprises to obtain loans at low interest rates, but also contributes to the emergence of new businesses, expand existing businesses. This will lead to increasing employment," said Wohlers.
In addition, he said, this legislation will help reduce credit risks and thereby increase revenues.
The bill on movable property was prepared in 2008 as part of the IFC Azerbaijan-Central Asia Financial Markets Infrastructure Advisory Services project (ACAFI) with the assistance of USAID.
"The problem is that many private companies, especially small and medium businesses can not obtain loans at reasonable interest rates. The main reason for the refusal to provide a loan is that the security is not sufficient. Banks do not want to provide loans secured by movable property or provide loan at high interest rates because of high risk," said Wohlers.
Therefore, according to him, in connection with movable property, Azerbaijan needs to adopt a new Law on Secured Transactions and establish a registry department.
In addition to the positive features, the Law on Security adopted in 1998 also has some shortages. The Law on Security in this case does not help. Also, the problem in the legislation is the lack of transparency in the right to security in connection with vehicles," Wohlers said.
According to ACAFI project coordinator Teymur Heybatov, IFC continues to negotiate to find counterparty for advancing the state law on movable property in Azerbaijan.
"The project is being coordinated with various government agencies, that is, we are looking for government counterparty for its further promotion and adoption," said Heybatov.
According to him, now negotiations are being conducted with the Central Bank of Azerbaijan, which has not yet made a concrete decision. "After determining a counterparty and starting working, the law can be adopted within a year," said Heybatov.
A registry of movable property is expected to be created within ACAFI project.
"Movable property registry will include information about all kinds of movable property, excluding properties which are already registered such as vehicles, various types of equipment," Heybatov said earlier.
According to him, it also needs to determine at what state structure the registry will operate. In the world, different practices are used, and registries operate at the central banks, ministry of finance, real estate registry.
"All information will be processed online. According to the practice of other countries, the services of such registry are usually free," said Heybatov.
The ACAFI aims to strengthen financial market infrastructure in Azerbaijan, Kyrgyzstan, Tajikistan, and Uzbekistan by developing effective credit information sharing between financial institutions and introducing formal risk education and certification for financial institution employees.