SECO: Azerbaijan’s financial institutions need to expand range of services
By Kamila Aliyeva
Financial institutions of Azerbaijan should expand the range of services to stay on the market, said Simone Haeberli, the SECO Deputy Regional Director for the South Caucasus.
Haeberli made the remark while addressing a conference entitled "Reform in the field of encumbrance of movable property: the survey results and next steps" held with participation of representatives of the World Bank Group, the financial sector, the government, including Parliament, the Ministry of Economy, the Chamber of Financial Market Supervision and others in Baku on April 5.
"Financial institutions [of Azerbaijan] should develop new products and use innovations more systematically if they want to survive," Haeberli said.
She also stressed that “if financial institutions of Azerbaijan intend to be more competitive, they should better control their risks and costs."
The International Finance Corporation (IFC) and Switzerland believe that the reform, covering the sphere of encumbrance of movable property, as well as other reforms in Azerbaijan, will help to create a more transparent and efficient financial sector, according to Haeberli.
"The main goal of the reform is to contribute to the economic development of Azerbaijan, diversifying its financial infrastructure and simplifying access to finance, making them safer and cheaper, especially for small and medium-sized enterprises that find it more difficult to access finance," she said.
Executive Director of the Center for Analysis of Economic Reforms and Communications, Vusal Gasimli, in his turn, noted that the register of movable property, the creation of which is envisaged in Azerbaijan, will allow optimizing interest rates on bank loans in the country.
This was confirmed by the Center's international studies covering 21 countries, according to Gasimli.
"The register of movable property can ensure the development of financial services in all directions," he stated.
IFC specialist for financial sector Vasif Badalsoy, who also addressed the event, said that one third of the loan portfolio (33.4 percent) of Azerbaijani banks is secured with movable property.
"The unsecured deals make up to 60 percent of the credit portfolio of Azerbaijani credit institutions. Only about 10% of the loans were given under such collateral as both movable and immovable property, and the rest under real estate," Badalsoy said.
The IFC survey involved 14 banks and one non-bank credit institutions with total loan portfolio of $3.3 billion, according to Badalsoy.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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