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Entrepreneurs in Azerbaijan to receive loans under state guarantees

Finance Materials 2 July 2020 16:00 (UTC +04:00)

BAKU, Azerbaijan, July 2

By Eldar Janashvili – Trend:

There is an opportunity for entrepreneurs to receive loans under state guarantees and subsidies for some interest on loans in Azerbaijan, Trend reports referring to the Azerbaijani Economy Ministry.

The action plan on the implementation of the Azerbaijani president’s decree "On a number of measures to reduce the negative impact of the coronavirus pandemic (COVID-19) and the sharp fluctuations caused by it on the world energy markets and stock markets on the Azerbaijani economy, macroeconomic stability, issues of employment in the country and business entities" was approved upon the order of the Azerbaijani Cabinet of Ministers dated April 4, 2020.

In particular, the conditions for issuing a state guaranteed loan affected the following aspects:

- Loans under state guarantees are issued to entrepreneurs engaged in activity by type of economic activity;

- The amount of loan that each entrepreneur will receive must not exceed three million manat ($1.8 million);

- The grace period for the loan must not exceed 12 months;

- This mechanism applies to the loans for a period of three years with an annual interest rate of not more than 15 percent.

- The state guarantee is provided through credit organizations determined by the Supervisory Board of the Entrepreneurship Development Fund.

- Preferential loans issued through the funds of financial institutions and funds created by the state are not subject to guarantees and subsidies.

The Azerbaijani Ministry of Economy has also introduced a new platform for entrepreneurs. The entrepreneurs will have the opportunity to contact one of two banks to obtain the preferential loans for people affected by a pandemic in the amount of up to three million manat ($1.8 million) through the Electronic Credit Platform. A twelve-month grace period has been set for the loan.

There are such benefits for entrepreneurs that up to 60 percent of loans will be guaranteed by the state. Moreover, 50 percent of the annual interest rate is subsidized on these loans. For example, if an entrepreneur took a loan at 15 percent, then half of the loan will be subsidized through the state funds. That is, the entrepreneur will pay 7.5 percent for the received loan. This is also a great advantage for entrepreneurs.

Moreover, the new rules will ensure the rapid use of state support. The entrepreneurs will have the opportunity to apply for business loans online without coming to a credit organization;

The equal opportunities will also be created for entrepreneurs who will be able to track the status of their applications in real time. Promptness and transparency in obtaining loans will be ensured. The access of entrepreneurs to business loans will be increased. The quality and efficiency of services will be improved.

(1 USD = 1.7 AZN on July 2)

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Follow the author on Twitter: @eldarjanashvili

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