Azerbaijan launches preferential lending to entrepreneurs without property collateral
BAKU, Azerbaijan, June 13
By Fidan Babayeva – Trend:
Azerbaijan’s Entrepreneurship Development Fund has introduced new mechanisms for preferential lending to entrepreneurs, Trend reports citing the Azerbaijani Ministry of Economy.
In accordance with the decree of Azerbaijan’s president dated June 4, 2020, the procedure for granting soft loans at the expense of the Entrepreneurship Development Fund was approved and amendments were made to the charter of the fund, said the ministry.
“One of such mechanisms is the provision of soft loans for purchasing equipment in order to create access to soft loans for entrepreneurs without real estate collateral. The essence of the mechanism is that the soft loan is used to purchase new equipment, which should also be taken as collateral,” the report said.
The ministry noted that under this mechanism, the interest rate of banks will be 7 percent.
The new mechanism will make a significant contribution to expanding access of business entities to financial resources, supporting investment activity, economic growth and employment, added the ministry.
“Moreover, in areas requiring long-term investment in agriculture, for example, tea and gardening, the term for small loans was increased from 3 to 5 years, for medium-sized loans - from 5 to 7 years, and half of the loan set as a grace period. The main goal is to reduce credit risks and expand access to soft loans for small and medium-sized entrepreneurs,” the report said.
As of June 7, within the program on the provision of financial support to the private micro-entrepreneurs, 114,290 appeals were received, 106,771 of which were confirmed and presented to the Ministry of Finance for transferring allocated funds to the bank account of taxpayers.
The volume of financial support on confirmed appeals has surpassed 61.5 million manat ($36.1 million). By June 7, the State Treasury Agency of the Ministry of Finance ensured the transfer of funds in the amount of 60.8 million manat ($35.7 million) to 101,698 private micro-entrepreneurs.
(1 USD = 1.7 manat on June 13)
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