Asian Development Bank expanding support program in Azerbaijan
BAKU, Azerbaijan, Sept. 23
By Zeyni Jafarov – Trend:
The Asian Development Bank (ADB) has been supporting the Central Bank of Azerbaijan (CBA) and the country’s government in improving the system for developing and expanding financial services in Azerbaijan, ADB told Trend.
According to the bank, at present, technical assistance project providing consultancy support in strengthening of financial policy, regulatory, and institutional framework, as well as promoting consumer demand on appropriate financial services for micro and small entrepreneurs, particularly in rural areas, is underway.
As ADB stressed, currently the issue of introducing SME (small and medium-sized enterprises) first loss portfolio cover facility is under consideration, as well as risk-sharing mechanism to increase the lending volume by domestic financial institutions to the under-banked MSME sector is being developed.
It’s expected that the above facility will be managed by the Mortgage and Credit Guarantee Fund (MCGF) of Azerbaijan and under the ADB project, the scope and magnitude for providing guarantees could be expanded.
The bank pointed out that since August 2020, a consultancy firm funded by it has started discussing this project with relevant stakeholders in Azerbaijan and the results of the discussion will be presented at a workshop later this year.
“We welcome CBA’s measures taken to mitigate the COVID-19 pandemic’s impact on the finance sector, and noted that issues of the financial sector with stronger banks and non-banking credit institutions (NBCIs), effective risk mitigation schemes, new financial instruments; as well as improved capital market are under development,” ADB summed up.