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Expert: Decrease in interest rates on loans in Azerbaijan determined by their cost

Business Materials 6 September 2013 18:42 (UTC +04:00)

Azerbaijan, Baku, Sept. 6 / Trend, E. Aliyev /

A decrease in the rates of interest on loans granted in Azerbaijan, will be based on the reduction of their costs, Director of FINCA Azerbaijan non-bank credit organization, Manish Sane said on Wednesday at a press conference on the results of organization's activity for the past period since early 2013.

"As for microfinance, this business is very demanding on human resources in comparison to banking. We have a large staff who travel a total of over 50 kilometers a day in order to get to the customers, who may live in remote or inaccessible villages. Moreover, it is necessary to take into account the fact that we are issuing a loan, even in a very small amount of 50-150 manats, which are comparable to the cost of issuing them. All this makes the interest rates on them justified," Sane said.

According to him, the achievements of this year include a decline in interest rates on loans for small and medium businesses.

"The rate of interest on loans in the amount of $20 thousand to $100 thousand was reduced to 21 percent and is the lowest in the country in this segment. In August 2013, we granted the first loan in the amount of $100 thousand to an entrepreneur working in agriculture sphere," Sane said.

According to him, FINCA Azerbaijan has focused its activities on the country's regions.

"Of the total number of borrowers, the vast majority - 85 percent - live outside of the Absheron region," he said.

As of late August 2013, the total number of customers amounted to 146.21 thousand people.

FINCA Azerbaijan has been operating in Azerbaijan since 1998. It has 31 branches and 33 sub-branches in Baku and country's regions.

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