By Nigar Abbasova
Azerbaijan Mortgage Fund, which refinances mortgage loans of commercial banks and issues mortgage-backed securities, may soon expand the list of mortgage products.
Angela Prigozhina, who leads the World Bank’s financial and private sector work in the South Caucasus, said that the Bank continues its cooperation with Azerbaijani partners, including the Fund, Finance Ministry and the regulator (Financial market Supervisory Body (FMSB)) to develop the market of mortgage financing.
Prigozhina said that the transformed mortgage situation necessitates the development of new products and the Fund itself, mentioning that the cooperation will be focused on the development of new products, strengthening of the risk management system, and expansion of financing sources of the mortgage market.
The Fund currently provides two types of product, including social (maximum period 30 years) and standard mortgage (maximum period 25 years), while the annual interest rate on services amounts to 4 and 8 percent respectively.
The state budget allocated 50 million manats ($ 29.6 million) for the mortgage financing in 2016.
E-Mortgage system, which will operate via E-government portal, is expected to be created by January 1, 2017. The new system will facilitate getting a loan, increase the transparency in allocation of mortgage loan, as well as strengthen the control system of the Fund.
The AMF will be assisted in the e-mortgage project by the Ministry of Communications & High Technologies, the Financial Market Supervision Chamber and a number of ministries and departments. One of the main objectives of the system is to minimize human factor in the process of mortgage credits issuance, as well as reduce the number of required documents.
AMF is a state institution that was established under the presidential decree in September 2005. The entity acts as the government's agent in implementing the state's social housing programs and supports provision of dwelling space to Azerbaijani citizens through long-term mortgage loans.
Loans are paid in the Azerbaijani manat (national currency) and given to citizens of the country. Mortgage object can be either flat or private apartment. The amount of loan should not exceed 80 percent of the market price of a real estate, while monthly repayment amount on mortgage loans should not exceed 70 percent of borrower’s total monthly income.
Authorized organizations of the Fund include 8 banks (AG Bank, AzerTurk bank, Bank Avrasiya, Bank BTB, Xalq Bank, Kapital Bank, NBC Bank, Pasha Bank), 4 insurance companies (Qala Life, Qala Insurance, Pahsa Life, and Pasha Insurance), and 2 appraisal companies ( Bilandar and MBA Consulting Group).
Azerbaijan joined the WB Group in 1992.
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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