Details added (first version posted on 18:14)
Baku, Azerbaijan, Feb. 28
By Huseyn Valiyev - Trend:
Presidential decree on additional measures to address the problem loans in Azerbaijan will cover 800,000 people, Vusal Gasimli, Director of the Center for Analysis of Economic Reforms and Communications, said at a briefing organized for journalists on Feb. 28.
Gasimli said the state will allocate over 700 million manats to this end.
Speaking about the mechanism of compensation, he noted that a loan of $10,000, taken until Feb. 21, 2015, amounted to 7,800 manats. After the devaluation, it became equal to 10,500 manats, and the state will pay the difference of 2,700 manats as compensation to individuals, he said.
The same refers to the loans taken before the second devaluation – until Dec. 21, 2015, he noted. In this case, a loan of $10,000 after the devaluation amounted to 15,500 manats, he said.
It turns out that the difference between a loan amount before the first devaluation (in February 2015) and after the second devaluation was 7,700 manats, he added. The decree also provides for paying this difference from public funds, he noted.
There is one unchangeable rule relating both to the first part of the decree and to its second part – the maximum amount of compensation will be $5,000, he noted.
The second part of the decree concerns loans of up to $10,000 or 17,000 manats overdue for more than a year, he said. These loans will be restructured by the state, he noted.
For these purposes, the state will allocate 682 million manats to banks as soft loans, he added.
According to preliminary calculations, about 400,000 persons fall within the second part of the decree, he said. The Financial Market Supervisory Authority (FIMSA) and the Central Bank of Azerbaijan (CBA) are instructed to determine the exact figures, Gasimli noted.
Restructuring is an optimal opportunity for Azerbaijan’s banking sector, since banks won’t lose anything from it, on the contrary, they will be able to receive funds in a manat equivalent for a long period on favorable terms, he said.