Baku, Azerbaijan, Aug. 14
By Azad Hasanli – Trend:
The World Bank (WB) is ready to assist the Azerbaijani government in developing new mechanisms of lending to the private sector, Naveed Hassan Naqvi, WB country manager for Azerbaijan, said in an exclusive interview with Trend.
“Well, it’s not the government business to lend. We’ve seen the governments in developing countries financing specific things. And sometimes it works. But in general, you want the financial sector to make the decisions independent of the government’s influence,” said Naqvi.
He gave an example of the International Bank of Azerbaijan (IBA), over 80 percent of shares in which is owned by the government. On July 15, 2015, President of Azerbaijan Ilham Aliyev signed a decree on the measures for rehabilitation related to the preparations for privatizing the state-owned shares of the International Bank of Azerbaijan OJSC. These measures cover the purchase of the bank’s troubled assets by the government, as well as the support to ensure its liquidity and the restoration of capital.
“It [IBA] owned 35 percent of assets in the market. Its balancesheet was in serious trouble which is why restructuring recently took place. I think the government is taking steps to deal with IBA. But the reason why IBA got in trouble was because these decisions [on lending] need to be taken by private actors,” noted the WB official.
“I think certainly the bank [WB] is more than ready to offer advice and help in thinking through mechanisms through which loans can be made available to private entrepreneurs. IFC [International Finance Corporation] has a lot of experience in this field. They can work with individuals of financial institutions, they can work with them jointly to look at opportunities,” added Naqvi.
Currently, there are several government sources providing concessional loans, such as the National Fund for Entrepreneurship Support (NFES) and the State Agency for Agricultural Credit. In particular, Azerbaijani entrepreneurs have been provided with loans in the amount of more than two billion manats through the NFES.
