MORTGAGE DISAGREEMENTS STILL EXIST

Mortgage crediting is a new mechanism in Azerbaijan, directed at the resolution of accommodation problems of the citizens. However, within the shortest period interests towards the process enabled to assert firmly the mortgage crediting has future in Azerbaijan. If to accelerate the application of the privileges in the issue of mortgage credits for low-income people and remove labor-intensiveness of the procedures collection of documents for creditors, the mortgage will be in success in our country.

Thus, in March-May 2006 the Azerbaijani Mortgage Fund (AMF) distributed 22 credits worth 448,500 manats among citizens. Only in May the Foundation distributed 12 credits, or 2 times more than in April. In general, since the beginning of distribution of mortgage credits a total of 92 people appealed to benefit this privilege. The cost of apartments purchased was within the frames of 32,624 manats, while average sum of credits - 20,386 manats with the interest rating 11% a year.

AMF has set up the distribution of mortgage credits. Through its agent banks the AMF issued the first mortgage credits in the big cities of the country Guba and Ganja. Today 10 of 15 partner banks of AMF are involved in distribution of loans. Maximal monthly payment on the credits issued made up 280 manats, minimal 95 manats.

However, progress should be encouraged. At present work over the development of mortgage crediting is underway and its concept stipulating the development of initial markets is in process. Meanwhile, the world practice shows that it is necessary establish agent institutes and form secondary market (securitization) and internet-mortgage.

The NBA had meetings and studied the innovations used by the mortgage companies of Kazakhstan, Germany and other countries. "These countries voiced their will participate in the market as players. It testifies that the Azerbaijani market is very attractive in the sphere of construction of apartments as well," the Director of the Credit Organizations Control Department of the NBA, Rufat Aslanly, said.

The essence of the current work is to study fully the domestic market linked with the mortgage, as the mortgage crediting impacts on the general state in economy. Besides, work is carried out the players of the mortgage market, where the banking system, non-banking organizations (in particular, Shore Overseas involved in this field). The players are the insurance companies, which are in charge of insuring risks.

An IFC official` says the impact on the process should be done through non-government way to develop the mortgage market, though some experts do not rule out that the privileges in the first stage of development of the mortgage would be less beneficial. In this respect it is necessary to establish a mechanism in order to take into consideration all interested players. Moreover, the policy that government pursues also plays considerable role in the development of mortgage.

AMF has carried out preliminary talks with the international Finance Corporation, Swiss State Secretariat on Economic Issues (Seco) on delivery of technical assistance for the development of mortgage system of crediting, sign ed a memorandum on mutual cooperation with the intentional organizations ACDI VOCA, sponsored by the US Agency for International Development (USAID).

After the completion of work on technical assistance it is planned to set up a new project envisaging investing for support to the implementation of state program on mortgage crediting. The key peculiarity of the IFC is its involvement in investing in the private sector, in particular, the statutory capital in line with the market rates. The corporation does not accept the governments guarantees and take risks equally with other investors. Therefore, it could set up the implementation of investments as soon as all players of the mortgage market are ready, which could start in 2007-2008.

The most interesting question in this respect is the mortgage crediting for different categories of citizens. Unfortunately, the government is still unable to reach consensus on the issue.

Different bodies still present exclusive proposals. The proposals put forward by the national Bank of Azerbaijan, offer privileges in case of payment of initial fees on credit and terms of crediting. So the public budget might have commitments to every borrower, which complicates the conduct of registration. In accordance with the world practice, the application of privileges on the terms and payment of the initial fees is a regarded as interesting. Inquiry carried out by the AMF on the application of privileges testified that 80% of respondents regarded application of privileges to the initial payment as reasonable.

In particular, so far there is not agreement on the category of people that can claim at privileges, though relevant presidential decree quite clearly outlines them youth and field officers, the Cabinet of Ministers said. The development of privileges was instructed by the presidential decree dated 22 December 2005, which specified the rules for functioning of the Azerbaijani Mortgage Fund.

At present there does not exits consensus neither for character, nor amount of privileges. In particular, they offer apply norms, enabling only the claimants with monthly income of $200 or $300 might appeal for issue of mortgage loan. The banks regard this norm as extremely low. At present the citizens with legal incomes of $800-$1000 a month can be beneficiaries of mortgage credits.

As to interest rates, the President of AMF said that as a result of banking rivalry they will decrease to 8-9% a year. Upon joining of big bank to the process the interests will anew fall. Thus, the mortgage credits will be available for larger layers of population.

The bankers acknowledge that in condition of strict rivalry for clients the market is awaiting the limit of mortgage portfolio. However, the analysts beware of mass softening of terms of crediting will entail further rise in prices of apartments.

Subscribe to Trend in Google News! Subscribe
Renewables’ share in global energy supply to increase to over 25%
Renewables’ share in global energy supply to increase to over 25%
Renewable Energy Agency talks on projects in Azerbaijan’s liberated lands
Renewable Energy Agency talks on projects in Azerbaijan’s liberated lands
Azerbaijan notes decrease in oil prices
Azerbaijan notes decrease in oil prices
Loading Bars
Latest
Iran ready to attract investment in renewable energy sector - minister
Azerbaijan - supporter of normalization of relations with Armenia, says FM
Azerbaijan, Slovakia eye signing agreement on economic co-op
Slovakia to supply Azerbaijan with de-mining machines in near future
Azerbaijan denies rumors about impeding exports from Iran to Russia
Iran Standards and Quality Inspection Agency releases car quality report
Iran to complete railway transit corridors - RAI
Baku Expo Center to soon open 'Rebuild Karabakh' exhibition
Joint press conference of Azerbaijani and Slovak FMs held in Baku (PHOTO/VIDEO)
VTB Bank in Georgia to back up creation of Nuclear Medicine and Diagnostic Center
Uzbekistan to produce its first electric cars
Turkey's steel export to Uzbekistan surges in value for 9M2021
Turkey shares data for cargo traffic via domestic ports from Ukraine in 8M2021
Azerbaijani, Slovak FMs holding expanded meeting
Turkmen state concern to buy chemical products via tender
Azerbaijan’s 'Kalbajar' tanker leaves for first voyage
Renewables’ share in global energy supply to increase to over 25%
Georgia shares data on COVID-19 cases for October 19
Iran discloses volume of exports from Parvizkhan border terminal
PwC announces new strategy: The New Equation
India’s active Covid cases fall below 200k for the first time in seven months
Russia’s investments in US government securities in August remain at July level
Death accident takes place during construction of road in Azerbaijan's Kalbajar
Quake off Greece's Karpathos shakes eastern Mediterranean
Renewable Energy Agency talks on projects in Azerbaijan’s liberated lands
Israel's El Al Airlines starts talks to buy smaller rival Arkia
NEQSOL Holding ​comments on its intent to purchase shares in Ukraine’s largest cement producer
Azerbaijani president receives Slovak FM (PHOTO)
Azerbaijani president receives EU Special Representative (PHOTO)
Iran COVID-19 vaccinations on track - President Raisi
Iran continues to sell state-owned property
Iran textile industry faces smuggling challenges - official
Turkey names volume of cargo traffic via its ports from China for 8M2021
Turkmenistan’s education ministry opens tender for drip irrigation system
Turkey reveals volume of cargo shipment via local ports from Belgium for 8M2021
Iran boosts exports to Pakistan
Number and value of exchanged checks in Iran increases
Kazakhstan to develop railway corridors to China
Azerbaijan notes decrease in oil prices
Uzbekistan, Int'l Foundation for Electoral Systems discuss co-op prospects
Turkmen Khazar Consortium opens tender for building materials
Azerbaijan repairing small hydropower plants in liberated lands
Iran provides land for affordable housing project
Iran shares data on trade turnover with ECO member states
Iran sees increase in exports to Azerbaijan
TBC Capital publishes weekly economic review of Georgia
Most COVID-19 infection cases in Azerbaijan fall on Baku
Heydar Aliyev Center in Baku to hold concert of famous European chamber orchestra
Iran cannot accept loss of control for "gray zone" of drug trafficking via Karabakh - analyst
Colder winter could boost gas to oil switching demand
'Umblical cord': In Israel, Jaishankar hails contribution of Indian Jewish community
Further boost in OPEC+ output could risk building inventories above five-year average
India, US, Israel & UAE coming together to form a 2nd Quad?
Azerbaijani army starts command post exercises in Lachin district
Iranian currency rates for October 19
Iran makes investments in oil and gas fields in Ilam Province
Saipem to adopt Honeywell Forge software to create digital twin
Iberostar to purchase 10 tons of hydrogen
Uzbekistan completes construction of new airport in Sokh district
Karabakh’s rivers must be cleaned up before return of population – Azerbaijani deputy minister
Russia, Azerbaijan progressively developing co-op in agriculture – Russian ministry
Black Sea Trade and Development Bank launching new tender
India, Israel to start talks on free trade agreement next month
Baku International Sea Trade Port sees increase in cargo transshipment for 9M2021
Mexico to begin packaging Sputnik V vaccine in second half of November
Oil prices fall as weaker China growth, U.S. output stoke demand concerns
Turkmenistan’s enterprise launches filament lamps production
Germany might offer its experience in restoration of Azerbaijan’s Karabakh
Toshkent Metro to be under jurisdiction of Transport Ministry of Uzbekistan following presidential decree
Top U.S. envoy to Afghanistan stepping down
Georgia reveals TOP-10 of largest energy consumers in country
Over 70% of Iranians already received first dose of COVID-19 vaccine - Iranian President
Iran's ministry shares financial data on backing its industrial, mining enterprises (Exclusive)
COVID-19: Kazakhstan adds over 1,300 fresh cases in 24h
N.Korea fires ballistic missile as military activity surges
Algeria lifts lockdown nationwide amid drop in COVID-19 cases
Road crash kills 11 in Ecuador
Turkey summons envoys of 10 countries over Kavala statement
Gunmen kill at least 43 in northern Nigeria - state governor
Apple introduces M1 Pro, M1 Max chips
Number of COVID-2019 cases across globe exceeds 240 mln
Morocco police seize over one tonne of cocaine in Tangier port
Latvia announces four weeks of lockdown as COVID-19 cases spike
Chronicles of Victory: President Ilham Aliyev interviewed by Russian TASS news agency on October 19, 2020 (PHOTO/VIDEO)
Chronicles of Victory: October 19, 2020
Occupation Museum, Memorial Complex and adjacent Victory Park will be built in Fuzuli
Israel congratulates Azerbaijan on Independence Restoration Day
Turkish President congratulates Azerbaijan on Independence Restoration Day
Tigray forces say air strikes hit Ethiopia's Mekelle, government denies
Czech president too ill to work, politicians discuss relieving him of duties
PMs discuss Belarus-Kazakhstan economic cooperation
Pentagon chief says US values Georgia as strategic partner
Azerbaijan's flag illuminated on TV tower in Georgia due to anniversary of restoration of Azerbaijan's independence (PHOTO)
Iran unveils details of its trade turnover with Oman
Bahar Azadi gold coin price continues to fall in Iran
Iran’s Lavan Oil Refining Company reveals products on sale at IRENEX
Post Bank of Iran sees increase in revenues
Price of Turkmen gas supplied to China grows - Wood Mackenzie
Turkey's Presidential Administration congratulates Azerbaijan on Independence Restoration Day
Azerbaijan shares data on number of vaccinated citizens
All news