By Mirsaid Ibrahimzade
The welfare of the population is constantly being improved in Azerbaijan as an important element of the social policy. The recent solution of the problem loans issue is a vivid example of this.
Previously, Azerbaijani President Ilham Aliyev signed a decree on additional measures in connection with solving the issue of the individuals’ problem loans. The decree envisaged the payment of compensation to citizens whose loan burden increased as a result of the devaluation of the manat in February and December 2015.
Comparing the statistics of problem loans, this April there was a positive decrease of 12 percent in their share compared to April 2018.
The international rating agency S&P Global predicts a reduction in the share of problem loans in Azerbaijan to 16 percent of the total loan portfolio of the country's banks by 2021.
According to the agency’s study, the excessive level of problem loans reached its peak - 65 percent - in 2015, due to excessive lending in foreign currency.
Agency analysts emphasize that Azerbaijan began to work to solve this problem and actively engaged in reforming the bankruptcy system, expanding the rights of creditors and the depth of credit information.
Along with Azerbaijan, the analysis of S&P assessed banks in Russia, Kazakhstan, Georgia, Belarus, Azerbaijan, Uzbekistan, Ukraine and Armenia.
In general S&P notes a steady high volume of problem loans - about $150 billion for the eight countries covered in the report, which will remain an important factor limiting the credit ratings of banks in most of the countries.
Mirsaid Ibrahimzade is AzerNews’ staff journalist, follow him on Twitter: @MirsaidIbrahim1
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