BAKU, Azerbaijan, Jan. 16
By Leman Zeynalova – Trend:
The International Finance Corporation (IFC) has been supporting the private sector in Azerbaijan for more than two decades, investing around half a billion USD, including mobilization from other lenders, Aliya Azimova, IFC Country Representative in Azerbaijan, told Trend.
She pointed out that in addition, IFC has supported around $100 million in trade through its trade finance program and provided $250 million for the Baku-Tbilisi-Ceyhan pipeline.
“For many years, IFC’s investments have been complemented by a range of advisory projects aiming to support private sector growth, implemented in partnership with the State Secretariat for Economic Affairs of Switzerland SECO. These projects have supported investment climate reforms; helped build capacity within the banking sector in various areas, including on-lending to MSMEs; supported the development of financial market infrastructure; and promoted good corporate governance,” said Azimova.
She noted that IFC’s cooperation with Azerbaijan is gaining momentum recently and past year has been remarkable in terms of taking stock of the results of the cooperation.
“With our advice, the government of Azerbaijan has implemented a series of regulatory reforms to help improve financial infrastructure and allow more small businesses to access credit. Here are a few examples of the results achieved. IFC’s advice has helped develop a secured transactions law which allows small businesses, which often lack assets like real estate, to use their movable assets, including inventory, accounts receivable, and equipment, as collateral. As a result of the reform, a movable collateral registry was created. According to the financial sector regulator, since its launch in March 2018, lenders in Azerbaijan have filed notices to the registry for loan applications from 32,000 borrowers, including smaller businesses, enabling these businesses to obtain easier access to financing,” said IFC country representative.
She went on to add that with advice from IFC, the government has also adopted a modern law on credit bureaus, enabling the creation of the country’s first private credit bureau in 2018.
“That has helped improve the quality and range of credit information, reducing financial institutions’ risks and facilitating more lending. We have recently signed an agreement with Azerbaijan’s Bank Respublika to enable it to better manage its currency risk, helping ease access to local currency finance for local businesses and smaller firms, in particular. Under the terms of the agreement, IFC and Bank Respublika will execute cross-currency swap transactions that will allow the bank to hedge its USD-denominated funding and better manage its assets and liabilities. Through cross-currency swap transactions, the bank will improve access to long-term finance for its clients, helping local businesses grow and create jobs,” said Azimova.
Azerbaijan became a member of IFC in 1995.
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