Azerbaijan speeds up creation of its first private credit bureau

Business Materials 30 October 2015 16:49 (UTC +04:00)

Baku, Azerbaijan, Oct.30

By Azad Hasanli - Trend:

Azerbaijan is accelerating the work on creating its first private credit bureau, Teymur Heybatov, coordinator of the International Finance Corporation's (IFC) project on strengthening the financial infrastructure in Azerbaijan and Central Asia (ACAFI) told Trend Oct.30.

In order to create the credit bureau, it is necessary to make amendments to the laws on the personal data, banks, non-bank credit organizations and Code of Administrative Offences, he added.

Heybatov pointed out that the package of amendments to these laws is currently under consideration in Azerbaijan's presidential administration.

The list of the founders of the credit bureau includes 11 banks and two non-bank credit organizations. Access Bank, AGBank, Azerbaijan Senaye Banki, Bank Respublika, Demir Bank, Muganbank, PASHA Bank, Turan Bank, Yapi Kredi Bank Azerbaijan, UniBank, Kapital Bank, Finca Azerbaijan and AzerCredit are among them.

The IFC representative said that admission of new members to the credit bureau is scheduled after its creation.

"Banks and non-banking credit organizations, which are part of the executive committee, are shareholders of the credit bureau," he said. "Each of them will pay in an equal amount and will further make money on the bureau's activity. But the new organizations, which will enter the office, won't necessarily be its shareholders."

The initial amount of the share capital of the bureau will amount to 2.2 million manats. Heybatov said that this is a very approximate figure, which may change in the future.

In addition, he went on to add that a technical partner, which will own 51 percent of shares of the credit bureau, will join the list of the founders.

Currently, two companies, which were selected on a tender basis, are the applicants for rendering services on technical partnership - CRIF (Italy) and Creditinfo (Iceland).

The formation of credit histories of borrowers in Azerbaijan began in 2005 after the creation of the centralized credit register service under the Central Bank of Azerbaijan.

The registry covers the whole range of information on the banks, non-bank credit institutions, borrowers, owners of large shares in borrowers' equity, loans and deposits on them. In its turn, the Credit Bureau will be able to collect credit information from other financial institutions, such as leasing companies, organizations, engaged in micro-lending, non-financial organizations, including utilities and telecommunication companies, trade facilities, selling goods on credit, and so on.

According to the Central Bank in Azerbaijan, the number of physical entities' appeals to the Centralized Credit Registry Service reached 140,066 in January-September 2015 (compared to 47,499 in the same period of 2014).

During this period, the requests to the credit registry were obtained from 44 banks (2,353,885 appeals) and 41 non-bank credit organizations - 2,213,819 appeals.

As of September, the credit registry contains the information on 2,505,575 borrowers, 10,427,408 loans and 1,184,202 warrantors.

ACAFI project is aimed at improving the infrastructure of financial markets in Central Asia (Kyrgyzstan, Tajikistan and Uzbekistan) and Azerbaijan by creating an effective system for exchanging credit information and providing professional training and certification in the sphere of risk management among the employees of financial institutions.

The project will help financial institutions to take quicker and right credit decisions, thereby increasing the accessibility of financial services for individual consumers and small and medium enterprises in the region. This three-year project is being implemented in cooperation with the Swiss government.

There are 43 banks and 157 non-bank credit organizations in Azerbaijan. The official exchange rate is 1.0493 AZN/USD as of Oct. 30.

Edited by SI