Establishment of Credit Guarantee Fund Delayed in Azerbaijan
Azerbaijan, Baku / Trend corr I. Khalilova / Implementation of the project on establishment of a Credit Guarantee Fund is suspending due to delays in informing the German Development Bank KFW of the fulfilment of domestic procedures on the project, the head of the KFW Baku Office, Natig Abdullayev, said.
According to Abdullayev, after Azerbaijani President signed an inter-governmental agreement 5 June 2007 regarding financial cooperation in establishment of a Credit Guarantee Fund in Azerbaijan, the Foreign Ministry had to inform the bank of that. However, the bank has not been informed yet and for this reason the KFW cannot send a consultant for this purpose. The German Savings Bank Foundation for International Cooperation (SBFIC), which worked in this connection in Georgia and Armenia, will be a consultant for the project.
"The Credit Guarantee Fund will proceed to work after the consultant arrives," Abdulayev said.
KFW has approved €4mln for the realization of the project, with €3.75mln as guarantee for the establishment of the Fund and €0.25mln for payment of consultation services. The Fund will function as accountant in KFW's headquarters. In the event of appeals from Azerbaijani banks, the Fund will inspect them and appeal to KFW for a guarantee.
The conception provides for new selection of agent-banks for the Credit Guarantee Fund, though the partner-banks of the German-Azerbaijani Funds and Azerbaijani Microfinancing Bank can be also involved. The situation will clear up after the consultant develops a new estimation report and a new tender on bank selection is held.
Azerbaijani banks may borrow from international banks on the basis of credit terms of KFW who possess AAA+ rating. In the first stage, the amount of the Fund will total €2.3mln. The Credit Guarantee Fund has no limitations in attracting credit lines, but in the first stage, the amount of the guarantee will not exceed €500,000. Whilst attracting KFW guarantees, the banks cannot give loans exceeding €150,000.