How will Azerbaijan solve issue of problem loans?
Baku, Azerbaijan, Feb. 27
By Huseyn Veliyev – Trend:
Measures to address the situation with problem loans in Azerbaijan can cover overdue loans worth 500 million-1 billion manats, Samir Aliyev, expert of the Support for Economic Initiatives Center, told Trend.
According to Aliyev, the details will be known after the methods of compensation are determined.
"Experts have repeatedly voiced their approach regarding problem loans - namely, that the liability for their compensation should be shared between the government, banks and borrowers, with the state taking on the bulk of the compensation costs, and the borrowers handling the remainder. I think that the state must take certain steps today,” he said.
Some nuances, according to Aliyev, should also be taken into account when paying off problem loans, so as to prevent the dissatisfaction of the citizens.
First of all attention should be paid to the currency structure of problem loans. Whether this will be applied to all loans or only to foreign currency loans – in this case, US dollar loans – should also be decided upon.
He also considers it important for the period when the loan was taken to be accounted for (at the rate of 0.78 manats before February 21, 2015, and 1.05 manats before December 21, 2015).
"In this case, compensations are not allocated to persons who took loans after December 21, 2015," Aliyev said.
Recently, President of Azerbaijan Ilham Aliyev said at a meeting on economic and social issues that the issue of problem loans will be resolved in the near future. The head of state noted that very active work has been carried out since last year, and a package of proposals is being prepared.
According to the Central Bank of Azerbaijan, as of January 1, 2019, the volume of overdue loans in the country amounted to 1.585 billion manats, which is 12.2 percent of the entire loan portfolio of banks and non-bank credit organizations. In the structure of overdue loans, the share of manat loans accounted for 774.1 million manats (9.6 percent of all loans in the national currency), and the share of foreign currency loans for 810.9 million manats (16.54 percent).
($1=1.7 AZN on February 26)
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