BAKU, Azerbaijan, April 14. The goal is not to
reduce household borrowing but to ensure that its growth is built
on sound and sustainable foundations, said Shahin Mahmudzade,
Director General of the Central Bank of Azerbaijan, during a press
conference on the Financial Stability Report, Trend reports.
He noted that the key principle is for individuals to take on
debt only within their repayment capacity.
“The increase in borrowing is partly linked to a low initial
base. Additionally, international experience shows that borrowing
tends to rise as incomes grow. In this context, the overall
increase in borrowing can be considered normal; the main issue is
to prevent the growth of risky and vulnerable loans,” he said.
According to him, statistics show a decline in the segment with
a high debt burden above 45%.
"Instead, more people are now taking smaller loans, with the
number of borrowers rising from 41 people previously to 110 people
currently. This shift is considered more sustainable, as it is
preferable to have more individuals with smaller, manageable debts
rather than a few with large and difficult-to-repay obligations,"
Mahmudzade added.
The Central Bank stressed that household debt dynamics remain
under close monitoring. Despite positive growth in disposable
incomes, the share of debt in household disposable income has
increased. Compared to the end of last year, the household debt
burden-to-disposable income ratio rose by 0.4 percentage points,
reaching 18.4%.
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