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First private credit bureau establishment is under completion in Azerbaijan

Business Materials 3 February 2014 20:40 (UTC +04:00)

Baku, Azerbaiajn, Feb. 3

by Emin Aliyev - Trend:

The executive committee on establishing the first private credit bureau in Azerbaijan is finalizing a draft, IFC project coordinator for the financial infrastructure strengthening in Central Asia and Azerbaijan (ACAFI) Teymur Heybatov told Trend on Feb. 3.

"The representatives of the committee visited the credit bureaus of two companies-applicants for rendering the technical partnership services with the bureau," he said. "They became acquainted with the actual work of the proposed platforms."

CRIF ( Italy) and Creditinfo (Iceland) were winners of the corresponding tender announced by the executive committee. The applicants submitted both technical and financial parts of their proposals.

"The additional information about the founders and their financial state was requested from the companies," he said.

"A meeting of the committee will be held in late February," he said. "The participants will discuss the received information. The voting will be conducted to determine the technical partner of the bureau at the next stage."

"Another important factor in the bureau creation is to create the legal framework for its future activity," he said.

"We are constantly in contact with the Central Bank of Azerbaijan," he said. "The bill will be prepared in the near future according to the data. Afterwards, it will be discussed by various departments."

The negotiations are scheduled for the first quarter of 2014. A technical partner will get a controlling stake (51 percent of the equity) in the bureau.

An international partner will supply the software for the bureau. Proceeding from the experience, the International Finance Corporation also proposes to give a majority stake in the credit bureau to be established in Azerbaijan, to those who know how to manage it. This will reduce the risks in the work of the bureau and in particular, exclude disputes on certain issues between the banks.

Access Bank, AGBank, Azerbaycan Senaye Bankı, Bank Respublika, Demir Bank, Muganbank, PASA Bank, Turan Bank, Yapı Kredit Bank Azerbaijan and UniBank are potential shareholders of the future credit bureau planned to be established in Azerbaijan.

In 2005, the formation of credit histories of debtors started in Azerbaijan after the establishment of the Central Credit Register Service (CCR) under the Central Bank of Azerbaijan. The register covers the whole spectrum of personal data about banks, non-bank credit institutions, debtors, owners of large stock packages of participation in debtors' capital, their credits and pledges on them.

The credit bureau, in turn will be able to collect credit information from other financial institutions such as leasing companies, organisations involved in micro-crediting, non-financial organisations, including communal and telecommunications companies and trading by selling goods on credit.

The objective of ACAFI project is the improvement of the infrastructure of Financial Markets in Central Asia (Kyrgyzstan, Tajikistan and Uzbekistan) and Azerbaijan by creating an effective system of credit information exchange and introduction of training and certification in the field of risk management among employees of the financial institutions.

The project's activities will help financial institutions take quicker and correct credit decisions and thereby increase the availability of financial services to individual consumers as well as small and medium enterprises in the region. This three-year project is being implemented with the cooperation of the Swiss government.

Translated by NH
Edited by CN

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