Date: 24 May 2019, 11:12, READ:
"The problems of the majority of borrowers were resolved upon this decree," he said. "Relieving the credit burden of borrowers will allow them to become new potential clients of non-bank credit organizations and other financial institutions. This decree will also positively impact the liquidity of banks and non-bank credit organizations."
"Borrowers' credit funds will be restructured on concessional terms within this decree, which will positively influence the growth of liquidity of financial institutions," the deputy chairman said. "We think that a low interest rate in this sector is another positive result of the decree and it opens up broad opportunities for the allocation of additional credit funds for small and micro businesses. The growth of the market will reach at least 15-20 percent until the end of the year."
He stressed that until today, the main problem of microfinance organizations was associated with lack of funds.
"After the devaluation, the loans were issued exclusively in manat," he said. "The delays during that period by credit organizations alienated foreign investors, lenders and financial funds. However, President Aliyev’s decree mostly resolves this problem. Moreover, the delays were observed in debtors' credit histories. New lending became unavailable to them. This issue is being also addressed."
In his words, another important aspect is that the income of borrowers is becoming more transparent. The point is that income of small and micro businesses must be registered to be analyzed for compliance with lending.
"This is mainly implemented through tax accounting," the deputy chairman said. "I think that the reforms in the tax sector will affect the growth in the number of entrepreneurs registered in tax accounting. Thus, the existing potential will increase and the client base will expand."
He added that the Azerbaijan Micro-finance Association holds meetings with the Financial Market Supervisory Authority of Azerbaijan (FIMSA) in connection with the development of the market.
"As the Association, we summarize our recommendations on behalf of the microfinance sector and submit them to FIMSA," the deputy chairman explained. "One of them is opening the accounts by the non-bank credit organizations and financial organizations for the borrowers’ domestic activity. This will allow us not only to lend, but also to support debtors in small transactions within the country."