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WB to choose 5 credit organizations in Azerbaijan for issuance of micro-credits to IDPs

Business Materials 6 November 2012 22:01 (UTC +04:00)
The Social Fund for Development of IDP's announced tender for purchase of consulting services under the World Bank (WB) project on improvement of living conditions and incomes of internally displaced people (IDP) in Azerbaijan.

Azerbaijan, Baku, Nov. 6 / Trend J.Nasibova /

The Social Fund for Development of IDP's announced tender for purchase of consulting services under the World Bank (WB) project on improvement of living conditions and incomes of internally displaced people (IDP) in Azerbaijan.

This was stated in the fund report, published in the official press on Tuesday.

The purpose of consultants is also allocation of micro-credits to the persons concerned. In general, five highly qualified intermediary credit organizations will be selected with which the contract will be signed. Depending on the potential of organization the value of each contract will amount to approximately $ 200 thousand.

To receive a loan from the fund the authorized credit organizations must meet the following criteria: have a license from the Central Bank of Azerbaijan; the share of loans to displaced people in the total loan portfolio should be equal to the ratio of the area to the total number of the population; the organization has to issue loans, not exceeding the manat equivalent of five thousand dollars and 90 percent of loans should amount to three thousand dollars in manat equivalent; the market share must be at least 0.5 percent, the presence of the portfolio in the amount of at least 300 thousand manat; proof of profitability in the last three years..

In addition, authorized institutions should have a statement of an independent auditor for the last two financial years, a risk portfolio (over 30 days) up to five percent, they have to present documents to confirm the average credit losses up to three percent, repayment of these funds to the risk of real estate for last fiscal year below 20 percent, and others.

The tender proposals must be submitted to the Fund till November 20, 2012 at Baku, Tbilisi Avenue, 57D. Telephone: (99412) 431-87-69,
Fax: (99412) 431-82-11, Contact: Arif Mikailov.

Consulting services are involved within the third phase of WB project on improvement of welfare of internally displaced persons in the country.

As of today, Azerbaijan spent $2.125 million within the project with total cost of $78.53 million, $ 50 million of which will be provided by a loan from the International Bank for Reconstruction and Development (IBRD part of the WB group).

The WB allocated its first loan for $10.7 million in 2001 to promote economic development of IDPs. The sum included $10 million of WB loan and $700,000 of the Azerbaijani government, Hasanov added. The loan was spent on financing 199 projects of the IDP communities, and the project benefited 175,000 refugees.

Some $12.6 million was granted on the implementation of second project, 11.5 million of which were allocated through a loan from the WB. However, the funds allocated for the second project was not enough, so there was a need for additional funding. Some $24.19 million allocated on completion of the project, $15 million of which fall on the WB, and $8.69 million on the government.

These funds are allocated to implement 250 projects of displaced communities. About 189 micro-projects financing was completed, 32 projects were under execution, and 53 projects on the appraisal process for early 2011 in the frame of the project. As the results of a survey conducted by the bank in 2010, 87.4 percent of beneficiaries were satisfied with the results of micro-projects.

The third WB project on improving the living conditions and income of IDPs in Azerbaijan approved in 2011 is funded by the International Bank for Reconstruction and Development (IBRD is part of the WB). The share of government involvement in the project is $28.5 million. Thus, the overall funding of the project is $78.5 million. Azerbaijan and the World Bank (WB) signed a credit agreement in Baku on Nov.16, 2011.

Under the project, there will be over 200 micro-projects carried out that will cover 120,000-150,000 people. It will also contribute to improving the living conditions of about 30,000 people. About 1400 young people will be able to get training and grants to start their own business. In addition, about 1500 micro credits will be given to the displaced to open or expand a business.

In total, about 185,000 IDPs in Azerbaijan will have greater access to infrastructure services, to improve their living conditions and earning potential under the new WB project.

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