Last week's laws, orders and decrees in Azerbaijan (Oct. 10-14)
Maximum number of soft loan for business increased in Azerbaijan
President of Azerbaijan signed an executive order to increase effectiveness of state funds spending in order to boost entrepreneurship and improve spending mechanism in the country.
The order made amendments to the rules of money spending of the National Entrepreneurship Assistance Fund (NEAF).
Under the document, the amount of small, medium and large credits was increased dramatically. The maximum limit of loan rose from 5 to 10 million manats. The loans will be allocated for the term between 3 and 10 years depending on the amount of a loan.
Small loans can be issued in amount of 5,000 to 50,000 manat (previously 10,000 to 50,000 manat), average loans - from 50,000 to 500,001 manats (it was from 50,001 to 250,000 manat) and large loans - from 500,001 to 10 million manat (previously 250,001 to 1 million manat).
If under current rules of NEAF, the maximum amount of large projects was five million manat, which could be allocated under an investment project, but now it increased to 10 million manat.
According to the order, the terms of loans were also increased - for small loans from two to three years, average - from three to five years, and large loans - from five to 10 years.
The NEAF resources can be used to finance investment projects of businesses in the priority spheres of socio-economic development. The funds may be issued through banks and non-bank credit institutions at the expense of their risks.
Interest rates on soft loans for businesses remained unchanged. To finance the media, the lending rate is 0.5 percent per annum, and other projects - one per cent. The rate of the loan of the authorized credit institutions should not exceed six percent per annum (for media development projects - not more than four percent).
NEAF was established in 1992. The loans to entrepreneurs are provided through authorized banks and non-bank lenders, whose total number is 38. In 2011, the Fund plans to finance soft loans worth 125 million manats.
In general, in 2006-2011, the Fund received 453.1 million manat from the state budget to finance businesses upon soft terms.