BAKU, Azerbaijan, July 16. The International Finance Corporation (IFC) has invested over $850 million in Azerbaijan to date, financing nearly 60 projects in financial services, infrastructure, and manufacturing, as well as advising on improving the business environment, financial sector development, corporate governance, small and medium enterprises, and agribusiness, , Ines Rocha, IFC’s Regional Director for Europe said in an exclusive interview with Trend.
“Highlights include our work (in partnership with the Swiss State Secretariat for Economic Affairs SECO) to boost diversification by making it easier for companies to invest in the non-oil economy. That has contributed to fundamental business reforms, including in registration, inspections, licensing and permitting systems. In addition, we’ve supported three laws with strategic advice. The Law on Tourism aims to help reduce time and costs for the private sector. The Law on Food Safety introduced new methods to quality control the food chain and modernize national food safety management. And the Law on Investment Activity provides investment protection guarantees to help attract more investment,” she said.
Rocha noted that given agriculture’s high potential to boost non-oil growth and support rural jobs in Azerbaijan, IFC is working with the government to introduce innovative financing instruments, such as crop (pre-season) and warehouse (post season) receipts, to strengthen the sector and connect smaller farmers to global value chains.
“Small farmers often find it difficult to access loans because they lack real estate collateral, a requirement for banks. Crop receipts can be an effective solution, allowing farmers to use future harvests as collateral to obtain working capital financing to purchase seeds and fertilizers. Warehouse receipts, meanwhile, allow farmers to access financing using their stored crops in warehouses as collateral. In partnership with SECO, we have also supported local financial institutions in launching value-chain financing products, helping selected value chains (strawberry and hazelnut crops) increase competitiveness in export markets,” said IFC’s regional director.
Rocha noted that together with SECO, IFC has also supported a series of reforms to improve the country’s financial infrastructure and boost access to finance for smaller businesses.
“These include the modern law on credit bureaus, which led to the creation of the first private credit bureau in 2018, and the secured transactions law, which allows smaller businesses, which often lack assets, to use their movable assets—inventory, accounts receivable, and equipment—as collateral. To further strengthen the financial sector, IFC launched its asset-based finance (ABF) project to enhance the legal framework governing the regulation of ABF products. Looking ahead, we believe private sector solutions are key and we are committed to helping unleash the private sector’s potential to drive a sustainable and inclusive transition and create jobs,” she said.
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