High bank interest on loans inhibits SMEs

Baku hosted a conference on "The relationship with the Bank", during which they discussed the legal and financial aspects of the business.

The conference was one of the first events in the framework of the project "the right counseling centers for small and medium-sized businesses." The project is implemented by the public association "Education for Human Rights" with the support of the OSCE Office in Baku.

The problems need to borrow entrepreneurs said a member of the Milli Majlis Ali Masimli. Azerbaijan, a country where the bank interest on business loans is over a 30% per year. In this case, you can not talk about the normal structure of the business as well as risk factors repayment increases. According to the MP, there are objective reasons for the financial market: It is a high level of deposit rates, involvement of expensive funds from abroad because of the low rating of banks, the high rate of the Central Bank of centralized resources, etc. However, subjective reasons are much more control over the banking system of oligarchy, which also distributed the goods markets, the monopolization of the banking activities, etc. The Central Bank even manage to take from the banks "cap" on the centralized credit resources. In order to stabilize the situation in the financial market Masimli considers it necessary to direct the State Oil Fund of Azerbaijan AZN 2 bn for development of entrepreneurship, based on the introduction of modern technologies and know-how. May increase the amount of bank credit to the economy and the central bank. This is according to him, will also contribute to lower interest rates on bank interest. In the medium term, according to the deputy, the economist, the interest rates on bank loans entrepreneurship may drop to 10-20%. And when interest rates are equal to European parameters (maximum 10%), Masimli found it difficult to say.

Preliminary results of research to improve the legal protection of the recipients of loans in Azerbaijan, said the head of the project's legal and judicial reform of the German Society for International Cooperation Thomas Melzer. According to him, prepared a special bill to be presented in September. Among other things, the bill provides for minimum requirements for credit agreements with business entities, employing up to people.

The conference also heard of the availability of entrepreneurs to credit, including aspects of the lending business in the country.

The right of free advice centers for small and medium-sized businesses operating in Baku and Mingachevir. 08C