By Laman Mammadova
The Azerbaijani state has spent 633.22 million manats ($372.59 million) to pay its citizens’ debts which increased in value due to the devaluation of the state currency, the manat in 2015.
Thus, compensations on problem loans have been paid to 98 percent of citizens who applied, Azerbaijan Financial Market Supervisory Authority (FIMSA) said in a statement. The amount of payments amounted to 97 percent of the allocated funds.
In addition, 204.9 million manats ($120.56 million) of interest debt and interest on loans of over 126,000 borrowers were written off.
Moreover, the debt of 42,000 citizens was completely repaid. The restructuring of problem loans at a rate of 1 percent per annum has been commenced for 5 years. The loans of 76,334 borrowers totaling 153.8 million manats ($90.50 million) were restructured on preferential terms.
The restructuring process will last till late 2019.
In early 2019, President Ilham Aliyev signed a decree on additional measures in connection with solving the individuals’ problem loans. The decree envisages the payment of compensation to citizens whose loan burden increased as a result of the devaluation of the manat in February and December 2015.
The decree aimed at improving the welfare of the population is an important element of the social policy. The decree applies both to loans taken from banks and non-bank credit organizations. Credit unions are an exception.
According to the decree, opportunities have been created for restructuring on concessional terms of both US dollar loans and manat loans with a delay of more than 360 days. If the amount of compensation exceeds 500 manats, these funds are transferred to the account of the individual; if less, the payment are made via money transfer.
The payment of compensations for problem loans to individuals in Azerbaijan began on April 22. The payments have been made through branches of banks and Azerpost postal operator.
Leman Mammadova is AzerNews’ staff journalist, follow her on Twitter: @leman_888
Follow us on Twitter @AzerNewsAz