Banks to Reduce Lending Rates

In the presidential decree approving the state budget for the next year there is a point to be fulfilled by the Central Bank of Azerbaijan. The document recommended that the head of the CBA develop and implement a set of effective measures to reduce the difference between the interest rates on loans of commercial banks (for the population - 28 percent or more), and the discount rate (the refinancing rate) Central Bank - 3.5%.

In this case, the CBA once every six months should provide the head of state of the work undertaken in this direction.

Earlier, referring to the chairman of CBA Elman Rustamov, it was reported that the average interest rate on loans issued in the country this year is 14.3%.

The average rate on business loans, which account for about 75% of the total loan portfolio of banks, is 10.8%.

The average rate on consumer loans, according to Rustamov, is 18%, but in any commercial bank does not have such figures for the general population. These rates are practiced only for those who laid the real estate or cars.

In addition, there is a mortgage lending by 10.4%, but it was received by several thousand people.

The bulk of consumer loans are not secured by anything other than documents and "word of honor." The institute of trustees in Azerbaijan is not developed because there is no legal basis or the responsibility of such persons before the law. Interest rates on consumer loans range from 24 to 35%, as these loans are accompanied by high risks. --17D-