Tuesday August 9 2022

Procedures for use of financial support mechanisms eased

3 September 2021 13:46 (UTC+04:00)
Procedures for use of financial support mechanisms eased

By Ayya Lmahamad

The procedures for obtaining soft loans and the use of other mechanisms of financial support have been simplified based on the analysis conducted by the Entrepreneurship Development Fund under the Economy Ministry.

The ministry reported that the number of requirements for the necessary documents was reduced and a mechanism for the return of applications not submitted in accordance with the requirements to the bank without refusal of financial was created. In addition, the requirement of a business plan for loan applications for up to AZN 200,000 ($117,647) was canceled and the number of requirements for initial monitoring was increased from AZN 20,000 ($11,764) to AZN 50,000 ($29,411).

Moreover, the ministry underlined that based on the surveys conducted among business entities, a large number of documents were required when applying for loans to the Fund.

In this regard, the fund decided to reduce the number of required documents as the first step within the simplification plan.

Thus, individuals and legal entities who previously submitted 10 or 12 documents, respectively, wishing to obtain a soft loan, after applying the amendments, will submit six documents regardless of whether they are legal entities or individuals.

Furthermore, another important change concerns the cancellation of the notarization of documents.

The notarization of legal documents on the state registration of business entities, an identity card of the legal representative of a physical or legal entity, and documents at the place of business or property for the investment projects submitted by a business entity won’t be required.

Another problem identified from the analysis is the recollection of relevant documents for application by businesses and credit institutions, on which funding was refused due to improper submission of documents. According to the amendments, the submitted documents will be reviewed by experts within two days of receipt, and if any deficiencies are found, the documents will be returned to the authorized credit institution to address the deficiencies without rejecting the loan application.

Likewise, the ministry noted that when applying for soft loans entrepreneurs had to submit a business plan worth more than AZN 50,000 ($29,411), which created certain difficulties, especially for small and micro-sized businesses operating in the regions.

The new changes include the elimination of the business plan required for loans up to AZN 200,000 ($117,647), and instead of a business plan, a financial-credit analysis will be carried out with the receipt of the necessary information only.

Additionally, the initial monitoring of loans up to AZN 50,000 ($29,411) won’t be carried out. The assessment will be carried out on the basis of information provided by entrepreneurs for the indicated amount.

The implementation of the simplification plan adopted by the fund began on September 1, 2021.


Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad

Follow us on Twitter @AzerNewsAz

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