Problems of microfinance discussed in Baku

The Baku Park Inn Hotel extends the 7^th international conference on microfinance, according to Turan.

The conference, which started on Thursday, was opened by the AMFA Chairman Suleiman Keleshov, the head of the Economic Commission of the Milli Majlis of Azerbaijan Ziya Samedzadeh, the Head of the Permanent Mission of the ADB in Azerbaijan Olli Norojano and other officials. In the first day of the conference there were also some traditional ceremonies, particularly ads Professional of the Year in the field of microfinance.

Next the conference quickly picked up speed and moved to the substantive part. And there was much to talk about, because they discussed opportunities of microfinance throughout the world. If the beneficiaries of this process were initially only the poorest countries, then more countries are included now. Microfinance and its capabilities are discussed everywhere today, and in this area there is an intensive exchange of cross-country experience. This was evident from the composition of the participants representing many countries of the world.

As you know, this type of financing was introduced in 1983 and the creation of the first microfinance bank was initiated by Dr. Younis from Bangladesh. In a fairly short period of time it proved the advantages of this type of lending, which involved hundreds of thousands of poor people who have had a chance to open their own small business.

Microfinance proved a great help in the fight against poverty. The past forty years revealed not only a lot of the advantages of this type of lending, but also its weaknesses - in particular, a high degree of risk in this type of lending. It became one of the main topics of discussion on the first day of the conference. They discussed the Azerbaijani and international experience and, above all, the environment for microfinance in Azerbaijan. That included such important issues as the control of these structures by central banks, investment in the microfinance sector, and the financial coverage of this sector lending.

The conference also discussed interesting issues such as “innovation in agricultural loans” and “Islamic microfinance.” An expert on agricultural credits Erdal Kochoglu told about an interesting experience of microfinance in the Turkish Samsun rural community. The carefully balanced microfinance program has been so successful that the authors of this project appealed to the Turkish government with a proposal to reduce the amount of subsidization of agricultural loans, as it turned out, that the farmers participating in the project were already self-sufficient in the financial part. In some countries, particularly in South Africa, the microcredit market has reached its saturation, and how they should develop microcredit achieving these "limits" also became the subject of interesting discussions.

Especially interesting was the session regarding Islamic banking and Islamic microfinance. In particular, impressive figures were sounded – the volume of Islamic banking in the global lending is already $ 2 trillion. Some of the speakers in this session emphasized that in terms of "cannibalization" of traditional banks, Islamic banking with its principle of shared responsibility between the lender and the borrower may be a good alternative to this. Yasser Tariq from Pakistan told an interesting and successful experience of Islamic microfinance within Wasil Foundation.

The initiator of the conference is AMFA - Azerbaijan Microfinance Association. One of the main partners ("platinum") is Pasha Bank, and the "gold" partner of the project is ADB - Asian Development Bank. Among the organizers of the conference is EFSE - European Fund for Southeast Europe and a number of microfinance institutions in Azerbaijan. -0