Experts: Azerbaijan needs to introduce state regulation on pawnshop market
Baku, Azerbaijan, May 23
Azerbaijan needs to introduce a state regulation on pawnshop market, experts say.
Today, there is no separate law in the country that would regulate the activity of pawnshops. Partly their work is regulated by other laws and regulations, including separate articles of the Tax and Civil Codes.
Chairman of the Azerbaijani Banks' Association (ABA) Zakir Nuriyev told Trend that today pawnshops can not seriously compete with banks. Nevertheless, he believes, the activity of any organization that issues loans should be regulated.
The rules of Azerbaijan’s Financial Markets Supervisory Authority (FIMSA) do not cover pawnshops, therefore to some extent it is easier for them to work, the adviser to the chairman of the Board of NIKOIL Bank, financial expert Jalal Nagiyev said.
He told Trend that nevertheless such "unsystematic" activity of pawnshops creates difficulties for them and their clients.
"Banks and pawnshops can not be assessed as competitors. Surely, some banks have so-called "pawnshop loans", which are issued on bail of gold. However, in other issues their activities almost do not interact with activity of pawnshops," he said.
In addition, Nagiyev added, interest rates on loans in pawnshops are higher than in banks. However, it is easier and faster to get a loan in a pawnshop. This, in turn, can create certain risks for customers of pawnshops.
Earlier, FIMSA told Trend that the legal framework regulating pawnshop activities will be upgraded in Azerbaijan.
A source in the financial market earlier told Trend that FIMSA conducted survey among banks to find out which bank is currently issuing so-called "pawnshop loans" on bail of jewelry.
The financial regulator is currently studying the overall situation in the pawnshop market and subsequently plans to introduce a state regulation on this market, the source said.
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