Expert: Azerbaijani banks successfully monitor quality of loans
Azerbaijan, Baku, Aug.26 /Trend E. Aliyev /
Azerbaijani banks are successfully monitoring the quality of loans, the executive director of the Millikart Group processing centre Jalal Orujov said.
"Most of the banks are monitoring the quality of loans and as the customers make payments they are segmented in a certain way in accordance with the time of the payments of credits, as to whether they are paid on time, in advance, or with delays. On this basis, the banks collect a credit history of their customers," Orujov said.
According to him, this has resulted in a kind of credit bureau being formed within the bank itself.
"Accordingly, the cost of collecting this information will be the overdue money, or the money on credits which will not be repaid in time. However in future, this client base will allow the bank to work only with high quality customers. This is the cost for the collection and maintenance of such usable information for the bank," Millikart Group executive director said.
Orujov said that today it is possible to get full information about borrowers only from the Central Credit Registry under the Central Bank of Azerbaijan.
"Moreover, the Credit Registry contains information about the borrowers who have already taken loans. If a person takes a loan for the first time, it is in any case a risk. A bank is a commercial organisation and even if the loans are distributed massively, it is not done blindly. There is always a certain limit whereby the banks will cease distributing loans so massively, or will be stricter approaching the background checks of borrowers, but given the rate of growth of the economy, this limit is still far away," Orujov said.
According to the Central Bank of Azerbaijan in the first half of 2013, the country's banks granted loans of 13,774.1 million manats which is 28.3 percent higher than the same period in 2012. For comparison, in January-June 2012, this amount was 10,734.8 million manats.
Some 781.8 million manats (5.67 percent) of loans and credits out of the total portfolio exceeded the time limit, compared to 706.7 million manats (6.6 percent) in January-June 2012.
The statistics of overdue loans does not include similar loans of the Aqrarkredit non-bank credit organisation.
In 2013 the amount of overdue loans increased by 6.7 percent.
The official exchange rate for August 26 is 0.7844 AZN / USD.