Baku, Azerbaijan, April 24
By Ilaha Khalilova - Trend:
KfW German Development Bank is holding talks with the Azerbaijani Ministry of Finance on the transfer of the German-Azerbaijani Fund to its administration.
The terms of the contract with the manager of GAF - Savings Banks Foundation for International Cooperation (SBFIC) expires at the end of 2014. Accordingly, if Azerbaijan agrees to finance the services of the managing fund, then it can maintain its current status, KfW Baku office told Trend.
If the desire to finance does not appear, then GAF will join another fund operating in the field of lending to small and medium enterprises, the representative office said.
The negotiations will end in May. We should know about the date of completion of credit lines opened to member banks of GAF in this regard, the KfW Baku office said.
GAF's current portfolio makes up 11.8 million euros. The fund entered self-repayment, and it has earned three million euros for to date."
Uncertainty in the future work of the German-Azerbaijan Fund appeared after the refusal of the Azerbaijani government of the third confessional loan from KfW in the amount of five million euros, designated for the development of SMEs in the country.
Attracting a new foreign loan to support the business was considered unreasonable due to the fact that today the country has sufficient sources of financing SMEs.
At present, business financing funds are allocated both from the state budget, through
the National Fund for Entrepreneurship Support , the State Agency for Agriculture Credits, and through non-bank credit organizations and banks. By taking into account the existence of such a number of sources of funding, the government considered it unreasonable to increase the external debt of the country.
Since 1999, the German bank provided two tranches of 8.7 million euros to GAF. Their acquisition has been completed and at present, the banks` financing is being implemented from revolving accounts and the fund`s profit earned by them from the beginning of operations.
GAF partners are of Bank of Baku and Unibank (since March 2001), Parabank and Bank Respublika since January 2003, Demirbank and AGbank since September 2004, Rabita Bank, Mugan Bank and Nikoil Bank since 2006.
Translated by S.I.
Edited by C.N.
