Growth of lending to agriculture by 40% expected in Azerbaijan

Finance Materials 13 November 2018 10:31 (UTC +04:00)
The growth expected in Azerbaijan’s lending market.

Baku, Azerbaijan, Nov. 13

By Taleh Mursagulov - Trend:

The growth is expected in Azerbaijan’s lending market, the Adviser to the Chairman of the Board of Azerbaijan’s NIKOIL Bank, financial expert Jalal Nagiyev told Trend.

"Today, many banks in Azerbaijan are preparing for 2019, which should be a year of lending, because all economic indicators have gone up. The economy has entered a period of stable growth. And since the steady growth of the economy has begun, then, accordingly, it needs financial support primarily through loans," Nagiyev said.

The expert also noted that banks will increase lending to agriculture sphere by 40 percent, and lending to tourism, production and trade sectors - by 20 percent. Also the growth of lending by an average of 15 percent is expected in other sectors of the economy, the expert added.

Nagiyev said the securities market in Azerbaijan is not so well developed that the business sector could attract funds through the sale of securities.

"It is already clear that the banks of Azerbaijan have started preparing [for crediting]. At the moment, the recruitment, training of personnel, namely, "lending professionals" is underway. Such large banks as the International Bank of Azerbaijan, Pasha Bank have started active lending to small and medium businesses," Nagiyev said.

The expert noted that the state also began to provide comprehensive support for the development of small and medium-sized businesses, and it is clearly stated in the relevant roadmap that the development of small and medium-sized businesses in Azerbaijan will be a priority for the Azerbaijani economy.

In addition, Nagiyev noted that at the moment, many banks have increased their capital. At some point the banks will begin to increase the deposit stock, and also, possibly, the banks will start to cooperate with some international financial institutions in this area.

"In 2018, a positive trend appeared in the banking sector of Azerbaijan. That is, the market participants have already sorted out their problem portfolio, and at least they already know what to do with it," Nagiyev said.

As for the problem loans, the banks, at least, have restructured some part of the portfolio, the expert noted.

“Some loans have become uncollectible, almost all legal proceedings have been completed, only the execution of judicial decisions is left,” Nagiyev stressed.

According to the data of the CBA, the volume of loans in Azerbaijan as of October 2018 amounted to 12.302 billion manats, which is 5.54 percent more compared to the beginning of the year. Of these, 7.557 billion manats were issued in local currency, 4.745 billion manats - in foreign currency.


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