Azerbaijan eases procedures of using financial support mechanisms for entrepreneurs

Business Materials 2 September 2021 17:49 (UTC +04:00)
Azerbaijan eases procedures of using financial support mechanisms for entrepreneurs

BAKU, Azerbaijan, Sept. 2

By Zeyni Jafarov - Trend:

Procedures for obtaining soft loans and using other mechanisms of financial support have been simplified based on the analysis of proposals and applications received from business entities by the Entrepreneurship Development Fund under the Ministry of Economy of Azerbaijan, Trend reports on Sept.2 citing the ministry.

According to the ministry, the number of requirements for the necessary documents was reduced, a mechanism to return the applications, not submitted to a bank in line with the requirements, without refusal of financing, and to eliminate deficiencies was created, the requirement of a business plan for loan applications for up to 200,000 manat ($117,600) was canceled, as well as the amount of requirement for preliminary monitoring was increased from 20,000 manat ($11,760) to 50,000 manat ($29,410).

The ministry noted that business entities who took part in the surveys indicated a large number of documents required when applying for loans to the fund. In this regard, the fund carried out an appropriate analysis, studied the possibilities of obtaining information on the required documents from alternative sources, and decided to reduce the number of required documents as the first step within the simplification plan.

So, individuals and legal entities who previously submitted 10 or 12 documents, respectively, willing to receive a soft loan, after applying the planned changes, will submit six documents regardless of whether they are legal entities or individuals.

Another important change concerns the cancellation of the notarization of documents. According to the plan, notarization of legal documents on state registration of business entities, identity card of the authorized representative of an individual or legal entity, and documents at the place of business or property for the investment project submitted by a business entity won’t be required.

Another problem identified as a result of the analysis is the repeated collection of the relevant documents for applications, on which the funding was refused due to improper submission of documents, by business entities and credit organizations.

“So, according to the changes, the submitted documents will be preliminarily reviewed by experts within two days after their receipt by the fund, and in case of deficiencies, the documents will be returned to the authorized credit institution to eliminate the deficiencies without refusing to apply for a loan,” the ministry added. “This is one of the most important simplified conditions for authorized credit institutions and entrepreneurs, eliminating the loss of time associated with financing.”

The ministry also said that when applying for soft loans, entrepreneurs had to submit a business plan for their projects worth more than 50,000 manat ($29,410), which created certain difficulties, especially for small and micro-sized enterprises operating in the regions. The new changes envisage the elimination of the business plan required for loans up to 200,000 manat ($117,600). In accordance with this change, a mechanism for a simplified examination of loans will be established, and instead of a business plan, a financial-credit analysis will be carried out with the receipt of only the necessary information.

The last important point is that the initial monitoring of loans up to 50,000 manat ($29,410) won’t be carried out. The assessment will be carried out on the basis of information provided at the request of entrepreneurs for the indicated amount. This will also create the conditions for considering the investment project as soon as possible.

The implementation of the simplification plan adopted by the Entrepreneurship Development Fund began on September 1 of this year. This plan will facilitate the work of entrepreneurs applying for soft loans, save time and money, and ensure fast consideration of applications by authorized credit organizations and the fund.


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