BAKU, Azerbaijan, June 19. There was a weakening trend towards softening the lending standards of consumer and mortgage portfolios in the first quarter of 2023 in Azerbaijan, Trend reports.
This is stated in the results of a survey on lending activities conducted by the Central Bank of Azerbaijan (CBA).
The CBA notes that competition with banks and the quality of the portfolio had a softening effect on mortgage lending standards, while real estate market expectations and risk of ensuring had a tightening effect.
The main tightening factors were inflation, real estate market expectations and the solvency of the population as for consumer loans. The mitigating effect of competition with banks has decreased.
Demand for consumer and mortgage loans increased in the first quarter of 2023. The main drivers of demand growth were real estate market expectations, interest rates and digitalization. There is an increase in the level of public borrowing based on the assessment of the creditworthiness of the population by banks in the first quarter of this year.
“Thus, if 42 percent of banks noted no changes in the borrowed capital of the population, then 54 percent of banks noted a moderate increase in the level of borrowed capital of the population, while 4 percent of banks noted a moderate decrease, according to the survey," the CBA said.