Azernews.Az

Qabil Ashirov

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In the modern world, one of the most critical conditions for economic development and domestic welfare is the accessibility of financial resources to everyone—in other words, financial inclusion. From this perspective, the initiative to create new investment funds aimed at retail (small) investors within the framework of the "State Program on Expanding Financial Inclusion for 2027–2030" approved in Azerbaijan is one of the most strategic steps taken for the country's economic future. This decision is not merely a technical financial reform; it signifies the democratization of capital in the country, the mobilization of "under-the-mattress" savings, and the formation of a completely new economic mindset within the citizen-state-business chain.

Until today, the opportunities for ordinary citizens or small entrepreneurs in Azerbaijan to evaluate their free capital were quite limited. For years, people either converted their small savings into gold and foreign currency to protect them from inflation and kept them at home, or directed them toward bank deposits. Those with relatively larger funds turned to the real estate market. However, none of these traditional methods directly feeds the real sector of the economy (production, agriculture, innovations). Cash kept at home is dead capital; as for bank deposits, the cost of returning that money to business as a loan is very high. This program, covering the years 2027–2030, aims precisely to revive that dead capital and turn even a few hundred manats of an ordinary person into a joint project with the country's large factories and technological startups.

The individual investment funds planned for creation will serve as a unique "protective shield" for individuals with lower financial literacy who still wish to earn a profit. Entering the Baku Stock Exchange independently to buy shares of a company is both complex and risky for an ordinary citizen, as analyzing the market and calculating risks requires specialized knowledge. Investment funds, however, pool the small amounts of individual investors into a large pool and hand over management to professional financial managers. These managers invest the collected funds not just in one company, but across dozens of different sectors to diversify the risk. As a result, ordinary citizens are insured against heavy loss risks and gain the opportunity to earn a stable income thanks to professionals. This is an invaluable transition phase for the formation of an investment culture in society.

However, there is another side to the matter: the success of this initiative will depend directly on the execution mechanism and the citizens' trust in this system, rather than plans on paper. The designation of the Central Bank of Azerbaijan (CBA) as the primary executive body is a very correct and reassuring step in this regard. The CBA must first establish such a transparent and rigorous legal framework that citizens do not recall the bitter financial experiences of past years (for example, the traumas caused by some liquidated banks or unofficial financial pyramids) when putting their money into these funds. Audit and control mechanisms over the activities of the funds must be maximally strict and clear. If transparency is ensured, the influx of people into these funds will be inevitable.

Furthermore, this program offers a breath of fresh air for Azerbaijani business. Entrepreneurs operating in the country have been complaining about high-interest bank loans for many years. The activation of investment funds means that companies working in the real sector that wish to grow will no longer have to queue at the doors of banks. They will be able to present their business plans to these funds and be financed directly with the resources invested by the public. This will both lower the cost price of business and increase the competitiveness of local production.

In conclusion, the goal of launching at least one individual investment fund within the framework of the "State Program on Expanding Financial Inclusion for 2027–2030" is one of the main pillars of Azerbaijan's strategy to move away from oil dependence and build a sustainable economy based on internal resources. If this reform is successfully realized, the country's economy will gain a domestic investment source worth billions of manats, and ordinary citizens will become real partners directly receiving a share from the economic growth of their state. This new model, where the economy works for the citizen and the citizen works for the economy, has the power to elevate both social welfare and national capital markets to a completely new level.