TOP 10 Azerbaijani banks in mortgage lending

Baku, Azerbaijan, Feb. 19

By Abbas Akhundov - Trend:

Azerbaijan's authorised banks have issued 13,602 mortgage loans since the beginning of the Azerbaijan Mortgage Fund's (AMF) activity under the Central Bank.

The table shows the top 10 Azerbaijani banks in terms of the number of issued refinanced mortgage loans.

In 2013, the Azerbaijan Mortgage Fund (AMF) under the Central Bank delivered loans amounting to 112.9 million manat, or 50.1 percent more than the volume of financing as of 2012.

Mortgage loans worth 533.09 million manat have been delivered since launching financing through the AMF, 74.77 million manat - in 2012, 95.64 million manat - in 2011, 97.08 million manat - in 2010, 76.9 million manat - in 2009, 70.2 million manat - in 2007 and 5.6 million manat - in 2006.

The total amount of refinancing the loans issued by the banks previously amounted to 86.9 million manat in 2013. AMF placed bonds worth 57 million manat in 2013 and 300 million manat since the beginning of the mortgage lending.

Some 176 million manat were allocated from the state budget to finance the social mortgage.

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 are 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 percent, whilst the conventional loan is 20 percent.

Conditions of mortgage lending are as follows. Loans must be issued in Azerbaijani manats and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house. The volume of mortgage lending must not exceed 80 percent of the market price and the monthly payment must not exceed 70 percent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.

Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs and those making special contributions to sport as well as to the military with at least a three-year service term. Each family having the right to such a mortgage can only use the opportunity once.

There are 31 authorised banks belonging to the Mortgage Fund. Around 21 insurance companies and 11 appraisal organisations are participants of the mortgage market.

The official exchange rate is 0.7844 AZN/USD on Feb. 19.

Translated by NH

Edited by SM