Movable property registry to reduce Azerbaijani banks’ risks
Baku, Azerbaijan, May 2
By Emin Aliyev - Trend:
Establishing of a movable property registry in Azerbaijan will reduce the risks for the banking sector in the country, Coordinator of the International Finance Corporation (IFC) project on strengthening the financial infrastructure in Central Asia and Azerbaijan, Teymur Heybatov told Trend on May 1.
"We are actively working on a bill on secured transactions," he said. "Approving this document will establish a registry of movable property in Azerbaijan."
"The registry will allow registering the right of a claim to such property, when it acts as collateral for the loan," he said.
"For example, if today the bank issues a loan on the security of movable property, it runs the risk that an unfair borrower can formalize a loan at other financial institution on the security of the same property," he said. "This situation significantly increases the risks for the banks, so they are rather reluctant to accept movable property as a pledge. The registry allows registering the right to claim to this property. Thus, the bank which will register the pledge first will have priority."
"IFC is working closely with the Central Bank of Azerbaijan on this document," he added.
The bill was prepared by the ACDI-VOCA international organization assisted by USAID in 2008. ACAFI project was finalizing the draft in 2010. The bill has been finalized jointly by IFC and USAID since 2010. Then the Central Bank of Azerbaijan joined the process.
"We will submit our recommendations to the regulator in connection with the bill in May," he said. "I hope that it will be passed by late 2014."
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, organizations involved in micro-crediting, non-financial organizations, 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