Azerbaijani non-bank credit organizations may expand range of services
Baku, Azerbaijan, Oct. 16
By Taleh Mursagulov – Trend:
Azerbaijani non-bank credit organizations (NBCOs) can reduce their dependence on investors by expanding the range of services provided, the Executive Director of the Azerbaijan Microfinance Association (AMFA) Zhale Hajiyeva told Trend.
"If the legislative base allows the Azerbaijani NBCOs to expand the range of services provided, then they can increase their capital in local currency and reduce their dependence on investors," the executive director of AMFA said.
As an example, Hajiyeva cited the fact that in Georgia, Kyrgyzstan, and Kazakhstan, the NBCOs, along with their main activity, are also engaged in money transfers.
In addition, the executive director of AMFA noted that today banks are charged with various functions, and they earn money not only from issuing loans. At the same time, the NBCOs cover their operating expenses only through lending.
"If the NBCOs get involved in collection of fees for public services, implementation of money transfers, then they can increase profits in some sectors," Hajiyeva said, noting that this could positively affect the development of microbusiness in Azerbaijan.
Hajiyeva said in some countries, the NBCOs began funding start-ups. Therefore, it is important for Azerbaijani NBCOs to have their own resources in local currency.
“When these resources are accumulated in foreign currency, it comes expensive and is very risky. Due to the high risks, NBCOs cannot work with start-ups,” she said.
According to the data of the Central Bank of Azerbaijan, as of September 1, 2018, the loan portfolio of non-bank credit organizations has amounted to 401.1 million manats, which is 11.32 percent less compared to the same period last year.
During the reporting period, the share of NBCOs in the credit market of Azerbaijan has decreased from 3.7 percent to 3.3 percent.
The official exchange rate for October 15 is 1.7 AZN / USD.