NBCOs to be able to connect to “Baku Approach” to reduce problem loans’ volume
Baku, Azerbaijan, March 1
By Ilkin Shafiyev - Trend:
Azerbaijan’s non-banking credit organizations (NBCOs) will be able to connect to the “Baku Approach” in certain cases, Chairman of the Azerbaijan Banks Association (ABA) Zakir Nuriyev told Trend March 1.
“The “Baku Approach” will be applied if a client has overdue loans in several banks,” Nuriyev said. “It is unlikely that such clients in Azerbaijan will have more loans taken from the NBCOs. However, if this happens, the NBCOs, of course, will be able to get involved in this process.”
The “Baku Approach” is being created by analogy with the Istanbul and London approaches, which helped to cope with the financial crises in these countries.
According to the general principles of these approaches, a bank consortium restructures problem loans and facilitates loan terms for debtors who are in a particularly difficult situation.
Nuriyev added that the ABA expects the loan portfolio of Azerbaijani banks to grow in 2018.
“Lending to the Azerbaijani economy will definitely be increased if infrastructure projects being implemented in Azerbaijan successfully work,” Nuriyev said.
According to the Central Bank of Azerbaijan, the country’s credit organizations reduced the volume of issued loans by 28.5 percent compared to 2016, to 11.75 billion manats in 2017.
The volume of overdue loans grew 10.5 percent to 1.62 billion manats for the year. Their share in the loan portfolio of banks and non-bank credit organizations was 13.8 percent.
(1.7001 manats = 1 USD on March 1)