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Azerbaijan supports entrepreneurs’ existing loan portfolio

Finance Materials 3 July 2020 15:28
Azerbaijan supports entrepreneurs’ existing loan portfolio

BAKU, Azerbaijan, July 3

By Fidan Babayeva – Trend:

The state support is rendered for the existing loan portfolio of the entrepreneurs engaged in pandemic-affected spheres in Azerbaijan, Trend reports on July 3 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 world energy markets and stock markets on the Azerbaijan economy, macroeconomic stability, employment issues in the country and business entities" was approved upon the order of the Azerbaijani Cabinet of Ministers dated April 4, 2020.

“Ten percentage points of the annual interest rate on loans issued to entrepreneurs working in pandemic-affected spheres in manat until March 10, 2020, within the current loan portfolio without state guarantees worth one billion manat [$588 million] are to be financed by the state since March during 12 months,” the message said.

"Some 100 million manat [$58 million] has been envisaged for the implementation of this mechanism,” the message said. “Out of this amount, 50 million manat ($29 million) will be ensured through the funds allocated upon the order of the Azerbaijani president, and 50 million manat ($29 million) - through the funds of the Entrepreneurship Development Fund.”

“This support mechanism is especially important from the point of view of maintaining activity and employment in the spheres affected by the pandemic, reducing the financial costs of entrepreneurs, as well as preventing the growth of problem loan portfolio in the financial and banking sector and restoring liquidity," the message said.

There was the need to adopt relevant regulatory legal acts and make changes to the existing ones in connection with the improvement of the mechanism of supporting the development of entrepreneurship, the fulfillment of the tasks arising from the relevant paragraphs of the Action Plan, an increase in the access of business entities to the funds, investments in the non-oil sector in the country's economy, as well as the expansion of financing instruments of the Entrepreneurship Development Fund.

For this purpose, the Ministry of Economy has prepared a package of proposals on making the changes in the "Procedure for issuing preferential loans through the funds of the Azerbaijan Entrepreneurship Development Fund", improving the mechanism of state support for entrepreneurship development and expanding financing instruments of state institutions, public organizations of entrepreneurs, including the Azerbaijan National Entrepreneurs (Employers) Confederation and Azerbaijan Banks Association.

Broad discussions in connection with business entities operating in certain sectors were also held through the Azerbaijani Agency for Development of Small and Medium-Sized Enterprises (SMEs).

The "Procedure for issuing preferential loans through the funds of the Azerbaijan Entrepreneurship Development Fund" was approved upon the presidential decree dated June 4, 2020, and the changes were made to the charter of the Fund.

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