Azerbaijan’s credit unions need centralized funding
Baku, Azerbaijan, Aug. 25
By Anvar Mammadov – Trend:
Credit unions in Azerbaijan need centralized funding, Jalil Suleymanov, chairman of Azerbaijan Credit Unions Association (AKIA), told Trend.
“At present, difficulties in funding are the main problem of credit unions,” Suleymanov said. “Currently, only 30-35 of the credit unions operating in Azerbaijan managed to establish strong ties with donors and operate in normal mode. The remaining credit unions are gradually leaving the market.”
He added that credit unions are necessary for Azerbaijan as financial institutionы, since they allow providing necessary funds to low-income population.
“Lending via credit unions is very simple and affordable for low-income population, especially for farmers, as there are no collateral and trustee obligations,” Suleymanov noted. “At present, there are no banks or NBCOs (non-banking credit organizations) in Azerbaijan that provide farmers with such a fast, timely and inexpensive line of credit as credit unions do.”
“However, we need funding to continue our activity,” he added. “For now, we are looking for new donors, and we are also appealing to Turkish companies. In addition, negotiations are underway with Ziraat Bank Azerbaijan and other banks, but so far the talks have given no results. Foreign donors offer lending in US dollars, but this entails a great number of risks the credit unions cannot cover.”
According to the Financial Market Supervisory Authority of Azerbaijan, there are 76 credit unions operating in Azerbaijan.