Mortgage Fund to start issuing loans since 2006

Business Materials 18 December 2005 17:25 (UTC +04:00)

Approval of the Regulations of the Azerbaijan’s Mortgage Fund, the rules for the mortgage loans issuing by the President of Azerbaijan is expected the next week, the National Bank of Azerbaijan (NBA) told Trend. In accordance with the presidential decree on the mortgage system development in Azerbaijan, endorsement of these documents was required first prior to commencement of the Mortgage Fund established under NBA, operating.

According to Shahmar Movsumov, the NBA advisor, the loans will be allocated from the fund on the standard conditions and based on specific programs of the social assistance (for disabled people, young families) and only after that the benefits will be applied. The Cabinet of Ministers will decide what body will regulate these issues.

Movsumov considers, the funds allocated from the state budget at the initial stage will be sufficient for the fund’s operation. There exists also other possibility - use of the State Oil Fund (SOFAR) means, issue of securities, involvement funds from outside sources.

Negotiations on receiving technical assistance are currently held with USAID, the Swiss SECO institution. Later the mortgage paper will be drawn up and this document will be submitted to the Mortgage Fund, which, in its turn, will involve additional funds from the market. Thus, some time later the fund will regulate itself.

The Mortgage credit in Azerbaijan is supposed to be allocated for 15 years and the interest rate from 10% to 15% annual.