Details added: first version posted on 12:30
BAKU, Azerbaijan, Apr.25
Trend:
The Central Bank of Azerbaijan (CBA) has adopted a decision for credit incentives in the banking sector, taking into account the recommendations of the Financial Stability Board, Trend reports referring to the CBA.
The decision has been synchronized with the relevant measures provided in the order of Azerbaijan’s Cabinet of Ministers, and it also covers broader directions, including matters related to the restructuring of mortgage loans issued to individuals via the country’s Mortgage and Credit Guarantee Fund assets; the restructuring of business loans issued via assets of the state funds, as well as through support of participants of the insurance and capital markets.
According to the CBA, in order to support sectors of the economy and entrepreneurs affected by the COVID-19 pandemic, Azerbaijan will provide an opportunity to restructure loans issued by credit organizations to private business entities, including individuals engaged in entrepreneurship, from March 1, 2020, the quality of which is satisfactory, and interests on the loans will be subsidized by the state.
The term of these loans can be extended by banks on the basis of an appeal from entrepreneurs and a mutual agreement. In this case, the quality of the loan will not deteriorate until September 30, 2020, regardless of the financial condition of the borrower and the restructuring of the loan.
At the same time, it’s envisioned to create opportunities for restructuring business loans, which were issued via the assets of state funds and had satisfactory quality as of March 1, 2020. As a result, 1 billion manat ($59 million) was allocated from the funds of the Entrepreneurship Development Fund to provide benefits to about 10,000 business loan debtors.
To support individuals (not engaged in entrepreneurial activity), opportunities will be created for restructuring mortgage loans issued via Azerbaijan’s Mortgage and Credit Guarantee Fund assets. As a result of these measures, 23,000 borrowers will have the opportunity to take advantage of restructuring a total volume of up to 1.1 billion manat ($650 million).
The loans will be restructured based on the borrowers’ appeal. If restructuring of such loans issued before March 1, 2020 and having satisfactory quality is carried out before September 30, 2020, then their quality will not deteriorate.