The growth rate of consumer credit this year may fall below 30% - Expert

It's no secret that consumer lending in Azerbaijan today has become a very important tool and sometimes the only means of satisfying the everyday needs of the population .

This segment of lending over the past few years demonstrates the unprecedented growth and its peak was precisely in 2013 when the results of November when the volume of loans to households stood at 6.04 billion manat, increasing by 42% or 1.8 billion . manat, which is 5 times more growth in 2010 when the economy is only departed from the effects of the global financial crisis . Share this type of lending in the total portfolio of banks has also reached a record level of 40%.

One of the apparent reasons for this surge in consumer lending lies all in the same official statistics, according to which in the last five years, interest rates on loans to individuals fell by 3 percentage points to 18.34 %.

But it is hardly alone lowering interest rates provoked such growth . According to the expert of the aid, economic initiatives Samir Aliyev , it's really not so much only as not the main factor to increase the supply of consumer loans . Aggressive marketing policy banks spurred them until recently time to lend even without a certificate of employment, to make loans to those who already have debts with other banks to open several active lines of credit per customer, implement consumer lending on credit in installments which brought a new level development. But the end result of this policy was the pushing clients into a deeper debt hole , so at the end of 2013 the share of debt payments to income population has reached 20%.

This situation has not gone unnoticed supervisory authority and decisions of the Central Bank of Azerbaijan to curtail bank items in retail stores , as well as a ban on issuing loans without certificate of employment , involves long-term return to the process in a more moderate direction. In the next few months might get the following picture , the big banks have more access to cheap money will have to maneuver , because due to lower risks than in the same business lending to this segment as never attractive for them. For small banks due to their limited ability to access various sources of funding that will be the most difficult period , as a result they may lose about 40 % of the current customer base. It is expected that the growth rate of consumer credit will remain below 30 %, while interest rates on such loans may fall by 3 percentage points, Aliyev said. -15B -