Azernews.Az

By Kamila Aliyeva

Baku hosted a conference on “Financing through capital markets, listing and investments” on March 6.

The Azerbaijani banking sector will be able to overcome the challenges before it, Ziyad Samadzade, chairman of the parliamentary committee on economic policy, industry and entrepreneurship, said at the event.

He noted that the banking sector of Azerbaijan has gradually begun to recover, and the rate of national currency has stabilized, but the banks face new challenges.

“Today, the banking sector of Azerbaijan faces such tasks as more efficient use of lending and reduction to a minimum of banks operating at a loss. Moreover, it is necessary that the data indicated in the audit reports correspond to reality,” the MP said.

“If the audit was conducted transparently in banks a few years ago, today we would not have such a number of closed banks. In other words, today banks should work more transparently in order to restore the confidence of customers,” he added.

Assets of the banking sector of Azerbaijan amounted to 28.17 billion manats, and liabilities totaled 24.37 billion manats in January 2018. Capitalization of the banking sector totaled 3.8 billion manats as of February 1, 2018.

Alternative financial tools for entrepreneurs

Addressing the conference, Executive Director of Azerbaijan’s Financial Market Supervisory Authority (FIMSA) Ibrahim Alishov said that today Azerbaijani entrepreneurs need to use new financial tools.

“In this regard the Azerbaijani financial sector is aimed at providing entrepreneurship with access to alternative financial tools,” he noted.

“Today, Azerbaijani entrepreneurs resort only to a classic tool, such as bank lending, to expand production or increase working capital. It is time to think about alternative tools, moreover, we have the necessary infrastructure,” Alishov said.

He went on to say that presently, more attention should be paid to the development of the securities market for the market to meet the requirements of entrepreneurs.

“The problems of the securities market should be revealed and solved. Today, the participation of enterprises in the securities market is very limited. We should gradually change this tendency. For this purpose, the transparency of the companies, as well as corporate governance in the companies should be improved,” he said.

Alishov added that FIMSA is currently working to expand entrepreneurs' access to alternative financial tools.

“Derivatives can be cited as an example. Frankly speaking, the derivatives market in Azerbaijan is also limited. Only forex operations are conducted there. But there are other tools in the world, namely, futures, options, etc. We think that they should be used and offered for business in Azerbaijan. We are working in this direction, but business should also help us in this issue,” he said.

Touching upon the issue of register of movable property, he noted that it will be presented to the public during March.

The work on creating the register will be completed soon, he said.

“Entrepreneurs will have a broad access to finance through the launch of this register,” Alishov added.

The Azerbaijani parliament passed a law in 2017 on encumbrance of movable property, which envisages the creation of a registry of movable property. The law will simplify the use of various equipment and other movable objects as pledge in obtaining a loan.

The register of movable property, where information on movable objects will be stored, will allow, for example, any credit institution to check the object before it is accepted as a pledge, whether this object is a collateral object for another loan.

Under the law, a special portal will be created, with the help of which anyone can register his/her personal property and subsequently use it as collateral.

The Azerbaijani legislation does not prohibit the use of movable property as a pledge. However, credit institutions prefer not to take such a risk due to the lack of sufficient information, because it is not always possible to determine who actually owns a given property, whether it is already a subject of pledge or not.

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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