ADB proposes Azerbaijan to cancel a $100m credit for micro-financing
The Asian Development Bank (ADB) proposed the Azerbaijani government to cancel the approval of a credit for micro and agriculture financing due to delay in the development of the project, the Ministry of Economic Development, told Trend. The Cabinet of Ministers has been informed, while the final resolution is still to be taken.
The Ministry said that in August the government will get determined on the refusal from ADB credit, or the project will be realized in another modification. There is still a probability for maintenance of the banking component in the project, due to which the government once offered to refuse from the credit. The Ministry of Economic Development was sure that a component envisaging the upgrade of regional infrastructure of banks should be preserved in the project of ADB.
Banks are in need of assistance. Therefore, it is necessary to support them with cheap credits to allow them expand the regional network. High value avoids the banks from branching out at the expense of community deposits, Heydar Babayev, the Minister for Economic Development, told Trend. As a result there as achieved an agreement to maintain it if the amount of the loan for its implementation is cut. Earlier, $11.25m of $25m was envisaged for the development of branching out in the regions and the sum for micro-financing, and $2.5m for consultants.
Having got familiarized with the situation in the country experts got assured in lion demand for micro-credits, due to which the amount of the credit was increased to $100m. The first tranche will comprise $25m. In case of successful use of the credit, the government will appeal for the second and third tranches in 2-3 years.
The project, allocated for 5 year (2006-2010), has been considered at the government, while work in this direction has been suspended.