Baku, Azerbaijan, Oct. 9
By Anastasiya Savchenko - Trend:
One of the tasks that the Azerbaijan Microfinance Association is to solve envisages restructuring loan portfolios, and the corresponding work is being implemented in this direction, Deputy Chairman of the Azerbaijan Microfinance Association Jalal Aliyev told Trend Oct. 9.
“The Association plans to restructure loan portfolios of 3.1 million [manat] ($1.827 million),” Aliyev said. “We have already restructured about 1.4 million [manat] ($825,320), which makes approximately 45 percent of all loans that we have to refinance.”
It is also necessary to ensure refinancing of microcredit organizations in national currency, Aliyev said.
The deputy chairman of the Azerbaijan Microfinance Association also spoke about foreign investors who show particular interest in Azerbaijan’s microfinance market.
“Such organizations exist,” the deputy chairman said. “A few days ago, the Association held an event in Azerbaijan, and Aggreko company, one of the investors, also participated in the forum. During the meeting of Aggreko representatives with members of the Association, issues of raising loans from other funds and foreign banks were discussed.”
The deputy chairman drew attention to the mission of the Islamic Corporation for the Development of the Private Sector (ICD), namely the Islamic Fund on Microfinance in Azerbaijan.
“The legislation in force in Azerbaijan doesn’t allow banks and credit organizations to engage in financing on Islamic principles,” the deputy chairman added. “We know that the Islamic Development Bank (IDB) and the Azerbaijani Ministry of Economic Development signed a memorandum-protocol to improve the legal framework and provide local economic entities with access to Islamic finance."
He went on to say: "Nevertheless, before updating the relevant legislation, microcredit organizations registered in Azerbaijan are engaged in Islamic finance, and in recent years, the ICD has proposed and implemented projects for the technical support of our banks and non-bank credit organizations."
"We know that there are two credit organizations in Azerbaijan - one for financial development, and the other company, Fineco, that received such technical support from ICD. This technical assistance is aimed at developing accounting operations for the implementation of Islamic microfinance,” Aliyev added
As for the introduction of new business models in Azerbaijan, in recent years, innovations have improved not only in the banking sector, but also in other areas of the economy, Aliyev noted.
“Our local credit organizations use these innovations,” said Aliyev. “Let’s suppose that credit institutions already accept applications, as well as documents on salary and income, from our potential customers online through the E-Government Information System and its subsystem 'Asan Finance'. Our organization intends to introduce, within the law, technical capabilities and expand opportunities for providing credit services to our customers.”
($1= 1.7 manat on Oct. 9)