IMF supports measures to limit consumer lending in Azerbaijan
Baku, Azerbaijan, March 17
By Emin Aliyev - Trend
International Monetary Fund supports the measures to limit the consumer lending in Azerbaijan, head of the IMF mission on Article IV of the Articles of Agreement of the International Monetary Fund Raja Almarzoqi said in Baku on March 17.
"We appreciate the aspiration of the Central Bank of Azerbaijan (CBA) to preserve the neutrality of the monetary policy, as well as the initiatives to limit the growth of consumer lending as correct," he said. "At the same time, the consequences of such measures must be controlled. The recent actions taken by the Central Bank to strengthen the financial control rules will support financial stability. But there is a need for additional measures to improve the endurance of the system."
"The rapid growth of consumer lending mainly creates risks for borrowers," he added.
"In this regard, a decrease in a share of consumer loans would be beneficial amid an increase in a share of lending to the private sector and SME," he said. "There are very high interest rates in the consumer lending segment and as a consequence, the margin of banks. Of course, the limitation of this segment does not mean that the banks will immediately start lending to business. But if one limits the profitability, the banking sector will begin to look for other opportunities to gain profit."
The final report of the mission following the consultations on Article IV, which is annually held on a regular basis, will be published in late May.
Translated by NH
Edited by CN