Baku, Azerbaijan, May 23
By Anvar Mammadov – Trend:
In Azerbaijan, it is necessary to create mechanisms to support lending to the agricultural sector, Executive Director of the Association of Microfinance of Azerbaijan (AMFA) Zhalya Hajiyeva told Trend.
Hajiyeva said that AMFA continues negotiations with the Azerbaijan Mortgage and Credit Guarantee Fund to gain access to the mechanism of state guarantee of loans.
"We have made our own proposals and prepared a draft of rules of support to the loan guarantee mechanism by the NBCOs (non-banking credit organization). I believe that these mechanisms should be simple in the first place, and should be aimed at supporting the development of small and medium-sized enterprises (SMEs). One possible proposal is to establish a fund that would aim at guaranteeing agricultural loans or loans to SMEs. We have analyzed the international practice and found out that both forms of support offered by us are quite common in the world," Hajiyeva said.
Commenting on the need to expand the loan guarantee mechanism, Hajiyeva noted that at present the activity of the Azerbaijan Mortgage and Credit Guarantee Fund covers only banks, but it should be recognized that today not all entrepreneurs in the regions of Azerbaijan have access to banking services.
She noted that creation of a guarantee fund for just agricultural loans, taking into account the process of implementation of strategic road maps and the development of priority sectors of the economy for the country, could become a more acceptable model.
"AMFA has built its proposals on the basis of the execution of strategic maps and support to SME. We believe that we need to focus on supporting agriculture, as about 50 percent of the population of Azerbaijan is engaged in this area and there is a great potential that should be used. There is no need to create a new structure for this, as the NBCOs have already been working with agricultural loans for 20 years, it is only necessary to create the required mechanisms. However, it should be taken into account that the new guarantee mechanisms have been launched recently and it takes time to assess how they will work. Therefore, we have reached an agreement on the need to expand the mechanisms, but it is necessary to wait a little," Hajiyeva said.
She added that this mechanism (guarantee of agricultural loans) is of interest to foreign investors, with whom AMFA cooperates.
"We have foreign investors from Europe and the US, interested in investments in the agricultural sector. And if such a project is launched, they will be ready to invest and provide the necessary technical support," Hajiyeva said.
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