National Bank Offers Application of Market Terms for Commercial Mortgage to Encourage Foreign Investing

Business Materials 9 June 2007 12:42 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova / The National Bank of Azerbaijan (NBA) offers differing of social mortgage from the mortgage, issued on commercial terms. Elman Rustamov, the Chairman of the Managing Board of the NBA, announced that it can occur by the end of 2007.

"Taking into consideration the growth pace of the mortgage crediting, it should not be financed at the expense of state funds on permanent basis. Only social mortgage on privileged terms can be financed out of the state budget, while the commercial mortgage should be carried out on market terms," Rustamov stressed.

For instance, Latvia with the population of 2.5mln people had issued mortgage for €8bln for the shortest period and its major part was prided at the expense of the foreign financing.

According to Rustamov, if to maintain terms of financing the commercial mortgage at the current level, it might impede the approval of funds from foreign investors, and become a hindrance for additional financing of the community. "Therefore, we carry out serious work jointly with other economic departments and they propose Azerbaijan to maintain the financing of only social mortgage for the development of mortgage. To expand the opportunities of attracting internal and foreign financing it is necessary to apply mortgage on commercial terms," he added.