The Azerbaijani Mortgage Fund (AMF) has sent official letters of notification to authorized banks on the temporary cessation of financing mortgages. The majority of authorized banks of the AMF in mortgage financing said in reply to an inquiry by Trend . It was explained with the complete use of the funds.
The AMF financed loans in the amount of AZN 26.5mln out of the 2006 budget assignments. The additional AZN 500,000 came out of AMF's incomes.
The AMF finances mortgage loans allocated through 23 banking organizations. The banks clarified the reasons of cessation of crediting with the complete use of the Fund's budget.
In 2006 a total of AZN 26mln was allocated to the AMF out of the public budget, while the 2007 public budget's relevant assignment made up AZN 20mln. The Fund has not received the funds for 2007 and had to cease the issue of mortgaging.
Meanwhile, the Fund confirmed the fact of official notification to authorized banks on the temporary cessation of mortgaging.
So, the expected boom in mortgage did not occur in 2007. Infrastructure changes and improvement of the legislation led to double-cut in bureaucratic hindrances. Along with it the resolution of housing problems through allocation of flats at new buildings resulted in recognition of mortgaging.
Faik Mammadov, the Executive Manager of the Azerbaijani Mortgage Fund AMF, stated that the drawing of foreign capital to AMF in the current economic situation of the market is practically impossible. Presently, the consumer credits in Azerbaijan make up 30%, the deposit reached 20%, the mortgage credit is allocated by the average percent, 6% the rate of quotation of the Fund is 2% and privileged loan - 1%. These figures hinder attracting foreign capital," Mammadov stressed.
AMF should issue securities to draw subsidiary capital while the Fund operates in Azerbaijan for only a year and has a social course.
AMF and the Azerbaijani Finance Ministry will work in this direction after specifically satisfying the demands of the population