Azerbaijan, Baku / Trend corr I. Khalilova / The National Bank of Azerbaijan (NBA) has submitted to the Government a project for Provision of Mortgage Loan Guarantee Fund of Azerbaijan at the Azerbaijani Mortgage Fund, the Deputy President of the NBA, Rufat Aslanly, reported.
According to Aslanly, the Mortgage Loan Guarantee Fund can be put into operation in the second part of 2007. "Institutional and organisational work should be carried out before making decisions and putting into the Fund into operation. So, after a decision is made the establishment may take 2-3 months," Aslanly said.
The Fund will be formed on the basis of several sources of income. It will be put into operation already having certain capital. "We provide for introduction of a conservative approach to management of fees and capital, which will also lead to incomes," Aslanly said. According to the Deputy President, such Funds seriously estimate the stable state of the borrower while guaranteeing the loans in order to provide timely payments. Otherwise such an institution will not be able to stand the load.
The main purpose of the establishment of the Guarantee Fund is to eliminate initial fees when receiving of a mortgage loan in future. The fees have been cut from 30% to 15% after improvement of the mechanism of issuance of mortgage loans. In future initial fees will be paid by the Mortgage Credits Guarantee Fund. Another purpose of the establishment is to decrease the risks of a creditor.