Commercial Mortgage Rates in Azerbaijan to be Brought Closer to Profitability of State Securities
Azerbaijan, Baku / Trend corr I. Khalilova / Azerbaijani Mortgage Fund (AMF) at the National Bank of Azerbaijan (NBA) is getting ready to submit the suggestions on changes of the terms of mortgage crediting to the Government, the Executive Director of the AIF, Faik Mammadov, reported on 5 June. NBA has already initiated separation of social mortgage from commercial.
"The world practice, including the experience of Kazakhstan, display that in order to prolong mortgage crediting this tool should be based on market conditions, excluding social mortgage," Mammadov said.
AIF also suggests improvement of institutional structure of the Fund with consideration of future plans on AIF's entering foreign market for attraction of supplementary financing, issue of securities. The mortgage crediting programs supported by the Government should be intended for poor strata of the population, for development of special projects on purchase of dwelling. In order to attract foreign investments it is necessary to get the investors interested in acceptable terms. As it is in other countries, the key criteria are the rate of inflation growth, rates for securities issued by Central Banks and Finance Ministries.
"Those are the major terms for issue of securities by mortgage funds. In this connection it is necessary to increase the rates for mortgage credits, what will enable attraction of supplementary funds in future," Mammadov said.
According to Mammadov, the securities of AIF will be issued for medium-terms during the first stage. At the same time they will more profitable than within the framework of commercial mortgage.
Change of terms of mortgage crediting is stipulated in Presidential order.