Azerbaijan Micro Finance Institutions to Discuss Possibility of Overcoming Difficulties

The current economic difficulties in the country, time and economic constraints always stimulate innovation, said Executive Director of Azerbaijan Microfinance Association Jala Hajiyeva.

Speaking at the opening of the 8^th Conference on Microfinance, Hajiyeva noted that investors' interest in Azerbaijan continues.

"Islamic Development Group sees microfinance as a strategic goal and conducts research in Azerbaijan," she said.

The Chairman of the Board of Azerbaijan Micro Finance Association Suleiman Kalashov also stressed that the decline in energy prices affected the devaluation processes, and devaluation processes, in turn, had a negative impact not only on problem loans, but also healthy loan portfolios.

Kalashov said that currently the Association's members serve 370,000 customers.

"The loan portfolio is 485 million dollars, of which 210 million dollars has been issued by non-bank credit organizations," Kalashov said.

The Chairman of the parliamentary commission on Economic Policy, Industry and Enterprise Ziyad Samedzadeh said the cause of problem loans was not only in the reduction of oil prices.

"The main reason is a lack of professionalism of some financiers and their desire to give loans at all costs. Samedzadeh also criticized banks for reducing their staff.

"Banks at the first difficulties began to reduce their staff. It is not right. Banks should have a social responsibility. Soon economic activity will increase, credit recovery will take place, and these employees will have to be returned,” Samedzadeh said.

The President of the Confederation of Entrepreneurs Mammad Musayev did not agree with him and said all risks should not be passed on to the banks.

The Swiss Ambassador to Azerbaijan Philippe Stalder said the crisis is a good opportunity for reform and the financial market of Azerbaijan needs reforms.

"As a positive reform we should pay attention to the establishment of a bureau for loans and registry of movable property," he said.

The Director of Corporate and Institutional Banking at Pasha Bank Melih Mengu, in turn, stressed that in Azerbaijan, banks finance microfinance institutions in rare cases.

"Microfinance institutions are in need of funds. It should be noted that despite the existence of regional branches of banks, microfinance institutions in regions work better than banks and do this on specific areas," he said.    -----71D