Azerbaijan, Baku, May 3 / Trend A. Akhundov /
The share of problem loans in the mortgage lending portfolio of the Azerbaijani banks is at the level of 0.3 per cent which demonstrates the effectiveness of this mechanism in the country, chairman of board of the Azerbaijani Central Bank (CBA) Elman Rustamov told media today.
He added that a half the cases are related to family circumstances, rather than economic aspects. That is, choosing the borrower.
"This is a very low figure which shows that good regulation and an effective system were established in this sphere," he said. "The default is social, rather than economic. That is, the non-payment is related to someone who gets divorced, loses the head of the family and so on."
Mortgage loans have been delivered to more than 11,000 families up till now.
Around 40 million manat was envisaged in the state budget 2013 to finance the social mortgage. The ordinary mortgage is financed through the funds obtained from placing mortgage bonds.
Currently the maximum amount of a common mortgage loan through the AMF is 50,000 manat at a rate of eight per cent with a payback period of 25 years. Terms under the social mortgage it is 50,000 manat at an annual rate of four per cent with a payback period of 30 years. The initial payment under the social mortgage is 15 per cent whilst the conventional loan is 20 per cent.
Loans amounting to 15.19 million Manat, or by 4.47 per cent more compared to the same period of 2012 were delivered through the Azerbaijan Mortgage Fund (AMF) in the first quarter.
There are 27 authorised banks belonging to the Mortgage Fund, 21 insurance companies and 11 appraisal organisations all of which are participants in the mortgage market.
The official exchange rate is 0, 7845 AZN/USD on May 3.