Azerbaijan introduces innovations into its financial market
By Rasana Gasimova
Azerbaijan continues to introduce reforms and innovations into its financial sector to improve the quality of services and incomes generated by this sphere.
Thus, the share of cashless payments in card transactions carried out in Azerbaijan continues to grow, Chairman of the Azerbaijan Banks Association (ABA) Zakir Nuriyev
“According to the results of January-August 2019, the volume of cashless payments in card transactions amounted to over 2 billion manats ($1.2 billion), which is 58 percent higher than that in the same period of 2018. The share of cashless payments amounts to 20.4percent of the total card turnover. This exceeds the indicator of the same period of 2018 by 4.2 percent,“ Nuriyev said during the 6th Investors’ Fair held in Baku on October 4. The Fair was dedicated to the development of microfinancial sphere in the country.
He also noted that at the end of August the country had 7.2 million plastic cards.
Note that on September 26, 2018, President Ilham Aliyev approved the "State Program on Digital Payment Expansion in the Republic of Azerbaijan in 2018-2020". Due to this program, the Central Bank of Azerbaijan expects a decrease the cash transactions share in the economy from 74 percent (in 2017) to 40 percent (in 2020). At the same time, the annual growth of cashless payments in 2018-2020 is expected to amount to 17 billion manats ($10 billion).
Touching upon the financial market, Nuriyev noted that all the participants of Azerbaijani financial market should be regulated through a single prism.
The head of the ABA also stressed the need to regulate the activities of new financial market participants.
"In recent years, new participants have appeared on the market - fintech companies, various financial service providers. I believe that their activities should also be regulated. I know that draft law is already being prepared, and I think that it should be adopted soon," said Nuriev.
Note that the Chamber for Supervision of Financial Markets of Azerbaijan has developed Draft Law on Payment Services and Payment Systems. If adopted, this document will provide a legal basis for the issuance of electronic money and other new financial instruments, as well as expand the list of financial market participants.
Speaking at the event, Suleyman Kalyashov, member of the board of Azerbaijan Micro-finance Association (AMFA) said that over the past 20 years, Azerbaijani non-bank credit organizations (NBCOs) have provided credit services in the amount of about 4 billion manats ($2.3 billion) to the population.
Kalyashov added that 500,000 people used these funds directly, and about 2 million people - indirectly.
During the event, Elchin Habibov, director general of the Azerbaijan Credit Bureau said that the Bureau plans to launch a new credit scoring service in April 2020.
"We plan to modernize our scoring system. We have created a working group with our Turkish colleagues and will introduce a new scoring service in April 2020," he said.
According to his words, this model will allow launching new services on the market, particularly, analytical ones. "In addition, this will give a boost to the process automation and allow citizens to control changes in their own credit record," Habibov added.
He also noted that before the end of 2019, another service that allows credit organizations to send a large number of requests at a time to the Bureau will be launched.
"Currently, credit organizations can send only one request at a time to the Bureau. The new service will allow sending about 5,000-10,000 requests at once," said Habibov.
He emphasized that the share of scoring in general requests to the Bureau is gradually growing.
“Since the launch of the Bureau, we received 3.6 million requests, of which 1.9 million were scoring requests. In 2018, the share of scoring requests was 43.5 percent in total, whereas for the 8 months of 2019 this figure amounted to 61.5 percent, "he added.
6th Investors’ Fair is one of the most significant events in the microfinance sector in Azerbaijan annually organized by the AMFA Association in Baku. The Fair brings together the representatives of governmental bodies, international and local investors, non-bank credit organizations, banks, leasing companies, and providers of services to microfinance institutions.
This year’s theme of the Fair is "Microfinance at the Crossroad: Sustainable Development in the Digital Era".
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