Ansar Leasing: Situation intensifies in Azerbaijan's leasing market but problems remain
Baku, Azerbaijan, Nov. 28
By Taleh Mursagulov – Trend:
The situation in the Azerbaijani leasing market intensified in 2018 compared to the situation in 2016-2017, Hikmet Ibrahimov, general manager of the Ansar Leasing company, told Trend.
“If we compare the figures of 2011-2012, today the activity in the Azerbaijani leasing market is quite low,” he said.
“The construction sector remains the main sphere of leasing companies,” Ibrahimov added. “This includes the purchase of various equipment and machinery. Accordingly, a decrease in the volume of the construction market [according to the State Statistics Committee, by 15.8 percent in January-October 2018 compared to 10 months of 2017] narrows the leasing market.”
The experts explain this by the further amendments to the housing and construction legislation. The changes will oblige construction companies to register the facilities which are under construction and conclude all purchase and sale transactions with the help of a notary. The new bill will strengthen state control over the construction sector. In this case, payment for housing by shareholders will be carried out in stages, depending on the stage of construction.
The construction sector has previously formed 50 percent of the portfolio of leasing companies. So, in 2014, 100 million of a 200 million total portfolio accounted for it. However, as opposed to the current period, in the past the construction sector was actively developing and this supported the growth of the leasing market.
As for the company's leasing portfolio, Ibrahimov stressed that today it has reached six million manats, including about three million manats - toxic assets.
"Today, the company is working to reduce the problem portfolio,” he said. “Certain steps are being taken in this direction. In particular, we offer customers certain discounts."
“The company focuses on the efficient placement of its funds,” he said. “The company's assets are gradually being restored. Even if the company has certain losses, the reserves will make up the losses.”
Ansar Leasing was founded in Azerbaijan in 2008 by the Islamic Corporation for the Development of the Private Sector.