New Investors Appear on Azerbaijani Microfinance Market
Azerbaijan, October, 01 2012 -
The interest of foreign investors in the Azerbaijani microfinance market increases," executive director of the Azerbaijan Microfinance Association (AMFA) Jala Hajiyeva told Trend on Saturday. Several contracts are planned to be signed with microfinance organisations in the country up till the end of the year.
"Three new investors have begun talks with our microfinance organisations this year and are ready to sign the first contracts by the end of the year," she said. "These are the funds from the U.S. and Switzerland, interested in working in our region. Today the negotiations have positive results." Hajiyeva refused to disclose their names.
The amount of funding will depend on the potential of the market. At present, investors are becoming familiarised with market demand and the number of non-bank credit institutions (NBCI) meeting their requirements.
"Afterwards they will determine the limit for the country," she said. "In general, these fund holders are interested in the social impact of investments that would stimulate potential investment in their fund."
The international humanitarian organisations initially wanted to invest in the Azerbaijani microfinance sector. At present, their range has expanded. The pension funds join them now with funds established over the past six to seven years. They want the invested money to serve social welfare.
Today, pension funds from France, the U.S., Switzerland, the Netherlands, are investing via the Development World Markets are financing sources in Azerbaijan. One such social investor, Oika Credit (Netherlands) is based on three to four other funds operating in the Netherlands. At present, the total number of investors participating in the Azerbaijani microfinance market, is 20, Hajiyeva said.
"The interest in the Azerbaijani microfinance market was stipulated by the law on 'Non-bank credit organisations, prudential norms, as well as non-bank credit organisations' access to the Central Credit Register at the Central Bank," Hajiyeva said. "Regulating the market by the Central Bank is a guarantee and reduces the risk factor of financing of the sector."
Today, AMFA has 30 members, among them are nine banks dealing with microfinance, 16 non-bank credit organisations established by international humanitarian organisations, two leasing companies, two credit unions and the German-Azerbaijan Fund.
The total amount of the AMFA members' microcredit portfolio increased by 11.45 per cent during the year to exceed $720 million by late July. Growth hit 32.3 per cent in 2011. The share of the microcredit portfolio under risk is three per cent. It was unchanged compared to the figure of 2011.