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SECO to issue funds for fiscal development in Azerbaijan

19 December 2016 13:24 (UTC+04:00)
SECO to issue funds for fiscal development in Azerbaijan

By Nigar Abbasova

The Swiss State Secretariat for Economic Affairs (SECO) will issue some $3 million within the technical assistance on the second Financial Market Modernization Project to be implemented in Azerbaijan.

The agency, which is responsible for planning and implementation of economic and trade policy measures, is expected to initially allocate some $2.2 million ($ 1.25 million) after the conclusion of a deal.

Further, SECO will allocate additional $400,000 by November 30, 2018, and the same sum by November 30, 2019. The three tranches are expected to be totally drawn by August 2021.

Within SECO's technical support to Azerbaijani economy, WB experts will render their assistance to the government of Azerbaijan in the increase of financial stability via extending regulatory and legal frameworks of financial sector and enhancement of monitoring functions of the Financial Market Supervisory Body (FMSB). The assistance will cover five directions, namely supervision over the financial market, liquidation of banks, deposit insurance system, protection of consumers' rights and non-performing loans.

The WB is expected to develop recommendations on the revision of legislature in the sphere of bank liquidation, financial market, and improvement of supervisory function of the regulator.

Moreover, the Bank will also develop recommendations on changes in legal and institutional frameworks of the Azerbaijan Deposit Insurance Fund (ADIF) to bring the activity of the institution in line with international standards, accelerate the process of compensations payment and improve the financing mechanism within unforeseen circumstances. Also, the assistance will extend to the sphere of non-performing loans, including classification of credits, creation of resources, strategy on work with such loans, as well as the restructuring of non-performing loans without judicial intervention.

Azerbaijan and Switzerland have been cooperating effectively for already 25 years, including the cooperation within the SECO, which covers the microeconomic policy and ensuring financial stability.

In 2012, SECO allocated funds for the implementation of the first WB project on modernization of the financial market worth $4 million. The project was accomplished in June 2016 after four years of implementation, while the overall project implementation was assessed as successful

The objective of the project was to deepen the capital market, strengthen the capacity of AzerPoct, and improve consumers' financial literacy through technical assistance and capacity building.

Azerbaijan became a WB member in 1992. As of September 2016, the Bank allocated loans to the country worth $3.99 billion, while the funds were used to finance more than 70 projects.

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Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova

Follow us on Twitter @AzerNewsAz

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