Azserbaijan, Baku, Nov 23 /corr Trend A.Axundov/
The Azerbaijan Central Bank (ACB) is considering the insufficient expenditure of 20 million manat towards social mortgages as incorporated in the State Bud get for 2012. Elman Rustamov chairman of the Central Bank of the country said in Parliament during the discussion of the draft state budget for 2012 and the next three years.
"Social mortgage is a very important social programme, not only socially, but as an economically directed programme. It is supporting the construction sector of the economy and creating jobs. We feel inadequate at the budget of 20 million manat in 2012 and it is necessary to consider the allocation of additional funds if the country has the financial case for it, "Mr Rustamov said. Currently the number of people receiving an approved social mortgage stands at 100 thousand.
"If we consider that the maximum size of the social mortgage is just 35 thousand manat, it means the 20 million manat will only be sufficient to provide mortgages to 600 people. The banks have already registered requests for a social mortgage budget worth 80 million manat. People want to use the system, not wait for the money "Mr Rustamov said, adding that it would be possible to alleviate the conditions of social mortgage today.
"This issue is especially acute and could be solved next year," Mr Rustamov said.
Under the AMF's terms, the maximum amount of the issuance of conventional mortgages in Azerbaijan is 50,000 manat at a rate of eight per cent and for 25 years, but the amount in the social mortgage is 35,000 manat, at an annual rate of four per cent over a period of 30 years. The initial fee for a mortgage is 15 per cent, whilst ordinary loans are 20 per cent.
Conditions of mortgage lending mean that the following: loans must be issued in the national currency with manats and only to Azerbaijani citizens. The granting of the mortgage can only be made for an apartment or private houses, the volume of mortgage lending must not exceed 80 per cent of the market price and the monthly payment for a loan must not exceed 70 per cent of the debtor's monthly income, as well as having to take our life insurance.
Preferable conditions are granted to members of families of war victims, national heroes' families, internally displaced persons, civil servants with at least a three-years work experience, PhD candidates and those with a doctorate, those making a special contribution to sport, as well as military personnel with at least a three-year service term.
Each family having the right to a low mortgage loan can only use this opportunity once.
The official exchange rate on Nov 23 is 0.7865 AZN / USD.