Azerbaijan, Baku, Aug. 6 /Trend, I.Khalilova/
The World Bank (WB) analyzes the results of technical assistance provided to the Azerbaijan Mortgage Fund, acting under the Central Bank, the head of the WB office in the country Joseph Owen said at a meeting with journalists.
"After determining the general framework of cooperation, it will be possible to provide support to the Mortgage Fund, said Owen. - The form of assistance - in form of loans or technical assistance will be determined based on the needs of the Fund for financial support."
He said the period of technical analysis will last from six months to a year.
In July the WB sent a mission to Baku to clarify the possibilities for cooperation with the Azerbaijan Mortgage Fund. In previous missions, the WB also addressed the issues of cooperation with the AMF, but the current mission was first directed specifically for this purpose and for a deeper study of this issue
International Finance Corporation (IFC is part of the WB) has already provided support to the Azerbaijani government to improve legislation in the field of mortgage lending.
It is very important to have proper and effective mortgage legislation to develop the mortgage market.
"Countries with the strongest laws in this area, on the one hand, provide for the sale of mortgage objects to compensate for losses in the borrower's default, and, on the other hand, alienate the property from the borrower only when absolutely necessary," IFC Project Manager Victor Mints said earlier.
The Mortgage Market Development Project has been implemented in Azerbaijan since 2005 in an attempt to develop the primary mortgage market in the country. The project consists of three main components - the improvement of legislation in the area of mortgage lending, institutional capacity building in mortgage lending and increasing awareness in this area.
Fitch Ratings upgraded the long-term ratings in foreign and local currency of the Azerbaijan Mortgage Fund from the level of "BB" to "BBB- with "stable" outlook at the end of the last year.
Azerbaijan's long-term Issuer Default Rating (IDR) in foreign and local currency upgraded from 'BB' to "BBB- with "stable" outlook.
"AMF's receipt of this rating corresponding to Azerbaijan's rating, first confirms the strong financial position of the fund, healthy loan portfolio, higher pay and its significant role in the implementation of public policies to improve housing conditions," the AMF reprted.
The receipt of a new credit rating reflects the continued support of the state, forming a perfect system of the asset-liability management and risk management of the fund, and creating an effective reporting system.
This international credit rating in the future will further enhance the fund's ability to borrow, as well as provide a basis for AMF's entrance to the international capital market and placing the Fund's debt securities at competitive interest on it. This, in turn, will create good conditions for the duration of the mortgage loans in the country, its uninterrupted and even greater expansion.
To date, the AMF has issued loans totaling more than 300 million manat through agent banks.
AMF was established in September 2005 by the Azerbaijan President's decree. Its charter was approved by a separate presidential decree in December 2005. AMF's main purpose is to create funding mechanisms which provide home ownership to Azerbaijani citizens, through long-term financing, and to attract domestic and foreign investment into mortgage financing.
