Baku, Azerbaijan, Sept. 6
By Anvar Mammadov – Trend:
The situation in the microfinance market of Azerbaijan is gradually stabilizing, Executive Director of the Azerbaijan Micro-Finance Association (AMFA) Zhalya Hajiyeva told Trend.
The executive director noted that the market began to recover gradually after the difficulties faced by the country's economy in 2015-2016.
"Currently, the number of our active clients is about 181,400 people. These clients have formed a loan portfolio in the amount of $254.5 million. In general, we can say that today lending in the microfinance market is gradually recovering," Hajiyeva said.
The executive director of AMFA stressed that the main problem of microfinance organizations today is the insufficient number of funding sources in national currency.
"To date, the main source of funding for microfinance institutions is foreign capital. The only Azerbaijani bank that provides funding to local non-bank credit organizations in manats, is PASHA Bank OJSC. Of course, this is not enough and does not meet the requirements of the market, and foreign investors still have not recovered funding in the previous volumes after the devaluation of the national currency in 2015. They expect a full recovery of the market," the executive director of AMFA said.
Hajiyeva noted that the AMFA continues negotiations with investors and hopes to expand financing in the next year. In addition, the executive director said, the negotiations with the Financial Markets Supervision Chamber of Azerbaijan also continue, in order to ensure that the country's microfinance organizations would have access to expand the list of provided services.
"In November this year, we will hold our next conference, following which we hope to increase the number of our partners. Negotiations are also underway with the regulator on new prudential rules that will help to revive the market. We hope that our investors will see positive dynamics in the market. As for the expansion of the NBCO's functions, this does not refer to attracting deposits. Yes, a number of NBCOs in countries of the region have such a function, but this requires a banking license, in addition, in this case, the risks significantly increase. We mostly want to get access to the implementation of such operations as the acceptance of utility payments, payment for telephone calls and internet," Hajiyeva said.
Touching upon the issue of problematic loans in the market, Hajiyeva noted that a positive trend is observed in this direction as well.
"While by the end of 2015 the share of problematic loans amounted to 70-80 percent, today this figure equals to 35-40 percent. This is a very positive trend, and we hope that it will continue in the future," Hajiyeva said.
According to the data of the Central Bank of Azerbaijan, the NBCO's loan portfolio in January-July 2018 amounted to 401.1 million manats (3.3 percent of the total portfolio of all credit institutions).