Azernews.Az

By Trend

In 2018, the authorized capital of the Azerbaijani Mortgage and Credit Guarantee Fund (MCGF) will be increased by 100 million manats up to 466 million manats, Fitch Ratings said in a report.

Fitch Ratings has revised MCGF outlook to Stable from Negative, while affirming the Fund's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'BB+'.

As of end-2017 the cumulative contributions totaled 366 million manats. For 2018, the government has approved the central bank's buy-back guarantee over a new 200 million manat bond issue. Due to a new mandate, MCGF will receive an additional 40 million manat transfer from the state to finance interest subsidy on SMEs' loans in 2018.

Fitch views the fund's role as strategically important to the state housing policy, as provision of affordable housing is a high priority for Azerbaijan. The fund is the only entity that provides subsidised mortgages in the republic.

The fund holds about 40 percent of real estate loans portfolio granted to households in Azerbaijan.

Azerbaijan Mortgage and Credit Guarantee Fund CJSC was established on December 25, 2017 by merger of the Azerbaijan Mortgage Fund and the Credit Guarantee Fund.

The Fund’s major objective is to create a mechanism of providing the population with living space through long-term mortgage lending, assist in attracting local and foreign financial resources for mortgage lending, as well as provide guarantees to entrepreneurs for manat loans taken from authorized banks, and grant subsidies for a part of the interest calculated on these loans.

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