Azerbaijan, Baku, Feb.5 / Trend corr I. Khalilova / The world financial crisis led to the increase of roles of small loans in the bank system of Azerbaijan. In 2009, they will have more importance, technical manager of the German-Azerbaijan Foundation (GAF) Andreas Franke.
"Some problems with small loans exist in international capital markets but they are regarded as more wholesome parts of portfolio," Franke said.
[The crisis caused some limitations in banks of developing countries concerning foreign borrowings. Therefore, banks now count on domestic sources in extension of financial capacities]
According to the head of the GAF, due to the extension of small lending, the fund awaits the realization of new projects to be financed by the GAF. This program involves GAF's partner banks Bank Respublika and Azerdemiryolbank which will receive roughly two million euro per each. The lending contract was so far signed with Bank Respublika.
Lending though GAF was extended as a result of large-scale activity in regions of the country. Presently, the fund covers 14 cities. Franke said that the fund's branches are planned to be opened in Sabirabad, Shirvan and Imishli in 2009.
Presently, GAF's lending portfolio includes 56 percent to trade, 28 percent to services and six percent to agriculture.
GAF started financing through KfW
loan in 2001. German bank allotted 8.7 million euros. Utilization of the funds
and EBRD loan has been completed and funding of local banks is carried
out through revolving account. EBRD joined financing banks through GAF as part
of Azerbaijan Multi Bank Framework Facility Project for micro- and small-sized
enterprises (AMBF-MSE) in 2006.
GAF current portfolio is 76 million euro under 15,350 loans. A total of 4,830
loans totaling 11.5 million euro were issued last year.
Agreement to establish GAF was signed in 1999. GAF started issuing loans in
March 2001. GAF partners are Bank of Baku and UniBank (from March 2001),
Parabank and Bank Respublika (from January 2003), Azerdemiryolbank and AGbank
(from September 2004), Rabita Bank and Mugan Bank (from December 2006), and
Nikoil Bank (from February 2007).
On Feb. 5, the official exchange rate is 0.808 manat to $1.
Do you have any feedback? Contact our journalist at [email protected]
