BAKU, Azerbaijan, Feb.1
By Fidan Babayeva – Trend:
International financial agencies have reduced financing of Azerbaijani non-banking credit organizations (NBCOs), Board Chairman of the Azerbaijan Microfinance Association (AMFA) Jalal Aliyev told Trend on Feb.1.
“One of the reasons for the funding cuts is that some funds have changed the criteria for regional activity in their strategic plans. Many regions are interested in the microfinance sector of developing countries,” Aliyev said. “Another reason is exchange rate risks that can be increased by funds raised in foreign currency.”
According to him, mainly for the above reasons, in the past 5 years there has been a decrease in funding from international financial agencies.
The share of financing for Azerbaijani NBCOs from external sources, that is, international financial organizations, banks, investment funds and other sources, before the manat’s devaluation (in 2015) was more than at the moment, Aliyev added.
At the same time, attracting loans from an external source is not the main condition, and the main issue is related to improving financial inclusiveness in the country, he summed up.
The micro-financing 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.
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