BSTDB provides loans worth $538.6m to Azerbaijan's private sector [PHOTO]
By Ayya Lmahamad
Since its establishment, the Black Sea Trade and Development Bank (BSTDB) has provided loans worth €510 million ($538.6m) to the private sector in Azerbaijan, the country's Finance Minister Samir Sharifov said.
He made the remarks at the Black Sea Trade and Development business forum on the role of BSTDB in supporting Azerbaijan's diversified and innovative economy in a changing world which was held in Baku as part of the 24th annual meeting of the bank, Azernews reports.
The minister noted that the BSTDB is actively involved in the development of the local markets.
Sharifov also noted that measures are being taken to diversify the country's economy, provide support to entrepreneurs, as well as provide them with preferential loans. He added that in this regard, Azerbaijan intends to expand cooperation with the bank.
Reconstruction of liberated lands
Moreover, noting that Azerbaijan is taking practical steps to ensure peace and cooperation in the South Caucasus, he recalled that immediately after the end of the Second Karabakh War, Azerbaijan began restoration and construction work in the liberated territories with its own financial capabilities.
"Over $3 billion were allocated for the restoration of these territories over the period from 2021 through 2022," he said.
The minister expressed the need for the participation of international organizations and the BSTDB in the process of reconstruction of Azerbaijan's liberated lands. In this regard, he invited the bank to support local business projects in Karabakh and Eastern Zangazur.
"Given the relatively low capital resources of the bank compared to other international financial institutions, as well as its specialization in private sector financing, we invite BSTDB to provide credit support to business projects of local and foreign entrepreneurs, who will operate in Karabakh and Eastern Zangezur," he said.
Sharifov stressed that the reintegration of the liberated lands into the country's economy, the creation of new international and regional transport-logistic corridors, and the effective use of these opportunities will bring great benefits not only to Azerbaijan but also to all the countries in the region and will give a serious impetus to the regional development.
Logistical and production opportunities
Black Sea Trade and Development Bank President Dmitry Pankin stated that Azerbaijan should use new logistical and production opportunities.
"Azerbaijan is a fairly rich state, but we need additional experience to develop new projects," he said.
Pankin mentioned that one of the main goals for Azerbaijan is the diversification of the economy, as the creation of a competitive economy is a very important task.
Dmitry Pankin's exclusive interview with Azernews ahead of the event in Baku shed a broader light on the bank's activities and plans for the future. To get first-hand information, we provide our readers to read the interview here.
Azerbaijan's economic growth
Speaking at the forum, Azerbaijan's Deputy Economy Minister Elnur Aliyev stated that the country's economic growth made significant progress in 2021 and this trend continues in 2022.
He mentioned that Azerbaijan's GDP growth amounted to 7.5 percent over the first four months of the year.
"The main goal for the next year is the development of Azerbaijan within the framework of national priorities until 2030. The main priorities are to increase the competitiveness of the economy, strengthen social justice, better competitive human capital, restore territories liberated from the Armenian occupation, and protect the environment," he said.
The deputy minister added that the implementation of these priorities plays an important role in the sustainable development of the country.
Azerbaijani banks - BSTDB cooperation
Elnur Aliyev also stated that the cooperation between Azerbaijani banks and the BSTDB in various directions in the future is of great importance. In this regard, he noted that the extensive investment portfolio of the bank creates great opportunities for this cooperation.
Noting that the current challenges include the negative impacts of the pandemic, conflicts in the region, and food security, he added that as a result of the disruption of the supply chain in the world, the prices of many products have increased, as well as inflation.
"All this actualizes the issue of taking countermeasures, which require the strengthening of cooperation between the public and private sector, as well as with international financial institutions," he said.
Non-oil sector development
Speaking at the panel discussion, Azerbaijan's Export and Investment Promotion Agency Head Yusif Abdullayev underlined that the major goal of the ongoing economic reforms in the country is the development of the non-oil sector.
Noting that investors can take advantage of various initiatives in Azerbaijan, he mentioned that there are several industrial parks in the country, which provide many benefits for investors and entrepreneurs.
"Azerbaijan has a very favorable investment climate, the same conditions are created for local and foreign investors, and all obstacles are removed," he said.
Moreover, Abdullayev added that Azerbaijan has great opportunities in the agricultural and industrial spheres, along with large-scale work to diversify the energy sector.
Small and Medium-sized Business Development Fund
Azerbaijan's Small and Medium Business Development Agency Chairman Orkhan Mammadov stated that the work is currently underway on the establishment of the Small and Medium Business Development Fund, which will expand SMBs' access to financial resources.
Noting that 99.6 percent of enterprises operating in Azerbaijan are SMBs, he stressed that taking this into account, support for the innovative development of SMBs is one of the key elements on the agency's strategic agenda.
Mammadov noted that the main feature of the fund will be its ability to offer grants and technical assistance.
"The requirements for the minimum value of the project for investment will be lower than existing ones in the market," he said.
He added that the organizational and legal form of the fund will be OJSC, which will enable to attract local and foreign investments, as well as funds from the private sector, in addition to state funds.
"It is also possible to mention the creation of SMB clusters as an effective organizational and legal model. The Tax Code of Azerbaijan provides for a number of tax incentives for SMBs cluster companies and participants. Currently, we are working on finalizing the normative-legal base of application of this model, he said.
The chairman stated that the formation of SMB clusters will stimulate more intensive and sustainable economic development and broader employment opportunities.
"I would also like to emphasize that these business models have a wide scope of application in the Karabakh reconstruction process. The digitalization of SMBs and increasing their role in the green economy are also key elements for economic diversification and innovation," he added.
In this regard, he added that the coronavirus pandemic demonstrated the importance and necessity of digitalization.
"As part of the SMBs digitalization process, the agency focuses on three key areas: enabling environment, knowledge provision, and resources. Regarding the enabling environment for digitalization, we offer several support mechanisms to stimulate innovation and digitalization of SMBs in Azerbaijan. These are the funding of domestic market research, grant projects for education, science, research, and innovation, as well as the provision of startup certificates that provide tax incentives, allowing new businesses to channel resources to innovative activities.
"To improve SMBs' access to knowledge, skills, and innovation, there are existing development centers in more than 20 regions of Azerbaijan that provide consulting and training services on creating innovative businesses, as well as act as an incubator for them. We also ensure the participation of SMBs in experience exchange programs. By introducing new e-services and platforms, our goal is to communicate more effectively with SMEs, improve service quality, and expand digitalization and its reach. Thus, we launched an e-learning platform that offers e-services to our development centers. The platform has made knowledge and skill development more accessible to SMEs during the pandemic," he said.
Within the business forum, the Black Sea Trade and Development Bank signed agreements with Azerbaijan's Rabitabank and Turanbank.
According to the agreements, the BSTDB granted loans to Rabitabank in the amount of $10 million and Turanbank in the amount of $5 million.
The Business Forum, organized by the Export and Investment Promotion Agency (AZPROMO) with the support of the Ministry of Economy, focused on "the role of BSTDB in supporting a diversified and innovative economy of Azerbaijan in a changing world".
To recap, the forum discussed issues of economic diversification and held presentations on the business and investment environment, and bilateral meetings.
Ayya Lmahamad is AzerNews’ staff journalist, follow her on Twitter: @AyyaLmahamad
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