Azerbaijan, Baku, March 1 / Trend A.Hasanov /
To ensure continued efficient operation at the initial phase it is proposed to exempt Guarantee Fund on agricultural loans from all taxes and mandatory contributions. The proposal was announced at the presentation of a draft concept of establishing a fund to guarantee agricultural loans held on Thursday by the AMFA (Azerbaijan Microfinance Association).
"Under condition of rising oil revenues of Azerbaijan opportunities enhance to provide state support in this direction. Due to the limited capacity in the formation of free resources, at the initial stage of the fund, at least for five years, there is a need for indirect and direct government support," said head of the research team Gubad Bayramov.
Direct state support is provided for in the form of lump-sum payment to the authorized capital of the fund, as well as in the regular provision of funds from the state budget for its support. Indirect support includes the exemption of fund from all types of taxes and obligatory payments.
"This will allow to move in future to the mechanism of self-financing," said Bayramov.
Support and grants from international organizations can also be considered among the sources of the fund.
According to the concept, the funds may be used for maintenance and management of the fund in accordance with the annual cost estimate, for the repayment of outstanding loans and the interest on them from customers.
The structure of the guarantee fund on agricultural loans will consist of a supervisory board and the board.
The Supervisory Board is made up of seven members - four representatives of state bodies (Ministries of Economic Development, Agriculture, Finance and the Central Bank), one representative from the AMFA, Azerbaijan Insurers Association and the Confederation of Entrepreneurs.
The Board will consist of five members. Executive Director, his deputy and members are appointed by the Supervisory Board
The concept has been prepared under a joint with Oxfam project of Azerbaijan Microfinance Association "The mechanism of insurance of agricultural loans".