Advanced insurance sector seen as driver of mortgage market
The insurance sector of Azerbaijan should be
strengthened to develop the country`s mortgage market, participants
of Monday`s conference on relevant issues concluded.
The event, "Mortgage and insurance: international practices and experiences in Azerbaijan," was organized by the Azerbaijan Insurers Association and the International Finance Corporation (IFC), a member of the World Bank Group, and brought together international experts, officials and representatives of major insurance companies of the world.
Aliya Azimova, head of the IFC`s Azerbaijan representation, said in her opening remarks that the project on developing the country`s primary mortgage market implemented with the group`s support chiefly aimed to boost the development of the mortgage markets of Azerbaijan and Central Asia. The project is financed by Switzerland`s State Secretariat for Economic Affairs (SECO).
Azer Aliyev, the project manager, said work was under way in three key directions. These include strengthening the institutional potential of the mortgage sector, improving the mortgage market and public awareness on related issues.
As part of the IFC-supported project, banks, insurance companies and groups engaged in evaluating real estate are being provided with assistance, in an effort to increase citizens` access to mortgage loans. In the future, the focus will be on the development of the domestic insurance sector.
Nailya Safarova, a SECO representative, said banks allocating mortgage loans in Azerbaijan tend to cooperate with insurance companies owned by the holdings they are included in.
"However, to develop the mortgage market, insurance companies are to be selected from the market. In this case, the risks involved in mortgage allocations will be minimized. Also, this might bring down interest rates on mortgage loans. As a result, the number of people drawn to the mortgage market will increase as well," the expert said.
Mortgage loans had begun to be allotted in Azerbaijan in 2006, but the government suspended the allocations in 2007.
The event, "Mortgage and insurance: international practices and experiences in Azerbaijan," was organized by the Azerbaijan Insurers Association and the International Finance Corporation (IFC), a member of the World Bank Group, and brought together international experts, officials and representatives of major insurance companies of the world.
Aliya Azimova, head of the IFC`s Azerbaijan representation, said in her opening remarks that the project on developing the country`s primary mortgage market implemented with the group`s support chiefly aimed to boost the development of the mortgage markets of Azerbaijan and Central Asia. The project is financed by Switzerland`s State Secretariat for Economic Affairs (SECO).
Azer Aliyev, the project manager, said work was under way in three key directions. These include strengthening the institutional potential of the mortgage sector, improving the mortgage market and public awareness on related issues.
As part of the IFC-supported project, banks, insurance companies and groups engaged in evaluating real estate are being provided with assistance, in an effort to increase citizens` access to mortgage loans. In the future, the focus will be on the development of the domestic insurance sector.
Nailya Safarova, a SECO representative, said banks allocating mortgage loans in Azerbaijan tend to cooperate with insurance companies owned by the holdings they are included in.
"However, to develop the mortgage market, insurance companies are to be selected from the market. In this case, the risks involved in mortgage allocations will be minimized. Also, this might bring down interest rates on mortgage loans. As a result, the number of people drawn to the mortgage market will increase as well," the expert said.
Mortgage loans had begun to be allotted in Azerbaijan in 2006, but the government suspended the allocations in 2007.
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