Azerbaijan has introduced a mechanism for restructuring debt obligations of credit organizations to the Entrepreneurship Development Fund in case of force majeure (natural disasters, epidemics, etc.) and a delay in repayment of loan obligations pursuant to the procedure established by the fund’s supervisory board, Trend reports with reference to the Azerbaijani Ministry of Economy.
According to the report, draft documents featuring mechanisms for providing state guarantees for new loans for entrepreneurs and subsidizing interest on these loans, as well as state financing of part of the loan interest of entrepreneurs with existing loan debt, were prepared and submitted for approval.
These projects provide for the expansion of existing financial mechanisms and the use of additional support tools to increase access to non-oil sector investments and financial resources of private sector entrepreneurs, as well as to mitigate the impact of the coronavirus (COVID-19) pandemic on the business environment and economic activity, the report said.
“Thus, according to the mechanism for providing state guarantees of business loans and subsidizing interest on these loans, a state guarantee to a share of up to 60 percent of the loan portfolio in the amount of 500 million manat ($294.1 million), as well as the state financing of 50 percent of the annual interest rate on these loans, are envisaged. This mechanism will apply to loans for a period of three years, with an annual interest rate of not more than 15 percent,” noted the report.
The introduction of new mechanisms will not only have a positive impact on the revitalization of the coronavirus-affected areas, the development of the real sector of the economy and support for economic growth, but will also play an important role in the implementation of investment projects of entrepreneurs who don’t have broad opportunities to provide collateral, the report said.
“In the application of this mechanism, processes such as further simplifying the access of business entities to financial resources, considering loan applications within the shortest time, accepting applications, conducting the necessary analyzes by credit organizations and by the Entrepreneurship Development Fund, as well as communicating decisions to entrepreneurs, will be carried out through an electronic credit platform developed by the Ministry of Economy. Currently, work is underway on its development,” said the report.
As of June 7, within the program on the provision of financial support to the private micro-entrepreneurs, 114,290 appeals were received, 106,771 of which were confirmed and presented to the Ministry of Finance for transferring allocated funds to the bank account of taxpayers.
The volume of financial support on confirmed appeals has surpassed 61.5 million manat ($36.1 million). By June 7, the State Treasury Agency of the Ministry of Finance ensured the transfer of funds in the amount of 60.8 million manat ($35.7 million) to 101,698 private micro-entrepreneurs.
(1 USD = 1.7 manat on June 13)
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