Azernews.Az

By Leman Mammadova

The volume of Azerbaijan Mortgage and Credit Guarantee Fund’s guarantees on loans for small and medium-sized enterprises (SMEs) is estimated at 31.099 million manats ($18.3 million), the Fund said in a message.

The provision of loan guarantees started in June 2018. At the end of 2018, the Fund’s guarantees on loans for SMEs were estimated at 17.5 million manats ($10.30 million).

As previously reported, the international rating agency Fitch expects an increase of the volume of these guarantees of the Mortgage and Credit Guarantee Fund up to 265 million manats ($155.9 million) in 2019.

Under the conditions, the Fund can issue guarantees on loans in the amount of from 30,000 manats ($17,652) to 3 million manats ($1.77 million).

At the same time, the loan term should not exceed 7 years, and the credit grace period should not be more than 2 years.

The authorized capital of the Fund equals to 566 million manats ($333 million). The agent banks of the Fund issued 26,795 mortgage loans in 2006-2019 for the total amount of 1.3 billion manats ($0.76 billion).

In 2018, the agent banks issued mortgage loans worth 273 million manats ($160.64 million).

Small and medium-sized businesses play an important role in the development of Azerbaijan’s economy. Development of SMEs leads to the growth of entrepreneurship, which is one of the priority directions of Azerbaijan’s economic policy.

The share of SMEs in employment in Azerbaijan was 76 percent last year, and in recent years, comprehensive work has been carried out for the development of SMEs. In particular, inspections of business entities have been suspended and the process of obtaining licenses has been simplified.

The share of SMEs in Azerbaijan’s foreign trade is planned to increase to 40 percent after 2025.

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Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888

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