BAKU, Azerbaijan, Sept.1
By Fidan Babayeva - Trend:
Non-banking credit organizations in Azerbaijan have received less financing from foreign bodies over the last 5 years, Chairman of the Board of the Azerbaijan Micro-finance Association (AMFA), Jalal Aliyev told Trend.
According to Aliyev, the share of financing of Azerbaijani NBCOs from external sources, that is, international financial organizations, banks, investment funds, and other sources before the devaluation of Azerbaijani manat was higher in comparison to the present time.
"During the spread of the pandemic, a significant decrease took place in this sphere. The reasons are the availability of foreign currency loans in the international financial organizations, hedge transactions, that is, the high cost of exchange rate insurance instruments, limited access to these instruments after the devaluation, and other equally important reasons," he said.
The chairman noted that following these reasons, the decreased funding from the international financial institutions has been recorded in the past five years.
"The mandatory attraction of loans from an external source is not the main condition. The main issue here is increasing financial inclusion in the country," Aliyev summed up.
The microfinancing was introduced in Azerbaijan in the mid-1990s as a strategy to meet the economic needs of up to one million internally displaced people and refugees who were forced to leave their houses during the Armenia-Azerbaijan Nagorno-Karabakh conflict.
A group of international non-governmental organizations (NGOs) began offering micro-financing services to low-income residents and war-affected people to create opportunities for obtaining income and jobs in 1996.
They began to meet informally to share information about their work experience to remove the limitations that international NGOs face by issuing the loans with interest rates aimed at achieving sustainability.
The members of this informal working group decided to formally form the group into an association that will serve as the coordination microfinance center in Azerbaijan in December 2001.