German SBFIC intends to keep its presence in Azerbaijan
Baku, Azerbaijan, May 27
By Zulfiya Gurbanova - Trend:
German-Azerbaijani Fund (GAF, Deutsch-Aserbaidschanischer Fonds) is waiting for Azerbaijani Finance Ministry's decision on continuation of its work in Azerbaijan, according to the GAF Project Manager, Eduard Schmidt.
Speaking to Trend on May 26, Schmidt said the decision has already been made and will be announced shortly.
"Everything has long been prepared from our side. All our proposals have been submitted to the Finance Ministry. Now we are just waiting to see what option they will take regarding the GAF's future fate. All decisions are reserved by the ministry, we can only wait," Schmidt stressed.
He went on to add that the German Savings Banks Foundation for International Cooperation (SBFIC, Sparkassenstiftung für internationale Kooperation) expressed its desire to remain as the GAF's main manager, regardless of its subsequent fate.
The agreement between Azerbaijan's Finance Ministry and SBFIC expires before late 2014.
Accordingly, if Azerbaijani side agrees to finance the services of the managing fund, it can maintain its current status, Baku Office of the German Development Bank KfW told Trend earlier.
"If there is no desire to fund it, the GAF will be merged with another fund, working in the country in the area of lending to small and medium businesses," German bank's office said.
"We want to control these funds regardless the side they are transferred to. We want all six agent banks to remain in the fund as well. And of course, we wish to expand the fund. But the ministry will decide what structure they will be in," Schmidt said.
The GAF is ready to expand its portfolio in any direction, in case of continuing its activities in the current status.
"Increasing the funds will also make it possible to replenish the list of partner banks," he said.
An uncertainty in the future work of the German-Azerbaijani Fund emerged after Azerbaijani government's refusal of the KfW's third concessional loan worth five million Euros, intended for development of small and medium entrepreneurship in the country.
It was decided that attracting new foreign loan to support the business was unreasonable due to the fact that today Azerbaijan has sufficient sources for financing small and medium businesses.
Currently, the funds for financing the business are allocated both from the state budget - through the National Fund for Entrepreneurship Support (NFES), State Agency on Agricultural Credits, and via the non-bank credit organizations and banks.
Given the existence of such an amount of funding sources, the Azerbaijani government considered it unreasonable to increase the country's external debt.
Schmidt also said the GAF's current portfolio is 12.2 million euros.
Starting from 1999, the German Development Bank KfW provided two tranches of 8.7 million euros to the GAF. Their acquisition has been completed, and at present the banks are being financed from the revolving account and the fund's profit earned since the start of its operations.
The GAF partners funded from the German bank's loan resources, include the Bank of Baku and UniBank (since March 2001), Parabank and Bank Respublika (since January 2003), DemirBank [earlier - Azerdemiryolbank] and AGbank (since September 2004).
Earlier, there more banks - Rabitabank, Mugan Bank and Bank Nikoil were served through the GAF starting from 2006.
They were financed from the loan resources of the European Bank for Reconstruction and Development (EBRD) as part of the AMBF-MSE program.
Edited by S.I.