Microfinance organizations should be adjusted to financial technology FinTech, Vusal Gasimli, Executive Director of the Center for Economic Reforms Analysis and Communication told during explaining the ways to reduce costs for microfinance organizations. at the fifth investor fair "Future of microfinance in Azerbaijan: drawbacks and opportunities” .
He stressed that microfinance organizations should be adjusted to financial technology FinTech: "There is no other way. Otherwise, we will not be able to lower microfinance costs. If the cost of microfinance does not plunge, the services offered will not be favorable for businesses or households, speaking at the fifth investor fair explained ways to reduce costs for microfinance organizations.
"We have repeatedly discussed this issue. We should offer available interest rates and financial services that both business and households are attractive to microfinance. I repeat it again that the only way is "Fintech”. It should be taken into consideration in Azerbaijani microfinance area.” the Executive Director added that a period of expensive loans in Azerbaijan has turned obsolete.
Member of Milli Mejlis Elmira Akhundova shared her views on loan issues as well.
"It is necessary to get rid of this tendency. The relationship between banks and citizens also concerns me. Indeed banking system is in a serious crisis and has not yet left the crisis. After a month – in November budget discussions will be kicked off in Milli Mejlis. I will say my opinion on this during the discussion. I'm currently analyzing the situation. In fact, people have lost their confidence in banking system. They prefer to save money at home or invest in construction. As they witnessed how other people lost their money in the banks which were closed. Moreover, interest rates are too high. That is why it is important to get rid of the existing unpleasant tendency. The attention of government officials should be paid to the recovery of the banking system. I do not claim that all banks are in crisis. There are healthy and reliable banks, at all. While big problems have remained." stated member of Parliament.
Will the new loan model be helpful on solution of problems in banking sector? How long does it take to apply this new model?
Economist Vugar Bayramov told that research should be lead due to this beforehand whether this technology can be applied. Anyway microfinance, reduction of costs and lower-cost micro-loans are crucial. First of all, it is important for the growth of small and medium-sized businesses. In my opinion, it is possible to realize this model in our country as well. There is a need to reduce of expenditures and plan it. Moreover, it is also important to strengthen competition among non-bank financial institutions. In my opinion, loans with lower interest rates are available. This technology can be applied to rise opportunity to give loans to small and middle businessmen. I suppose, foundation of the Loan Guarantee Fund will eventually provide possibility to decrease costs during during microfinance.