Jafar Ibrahimli: Creation of Credit Guarantee Fund will reduce entrepreneur's investment costs

Baku. 15 September. REPORT.AZ/ With the establishment of "Credit Guarantee Fund" OJSC in Azerbaijan, entrepreneurs which cannot pledge, will be able to get a loan and moreover, they will be released from part of due interest.

Financial analyst, Deputy Director of "PSG Capital" investment company, Jafar Ibrahimli told Report.

According to him, this will reduce investment costs by businessmen.

"The parameters of the loans to be guaranteed by the Fund should be clearly defined. Probably, it will be hard to warrant all the loans. If "Credit Guarantee Fund" operates on a mechanism to make decisions late as the country's other funds, it can damage the overall work. But in any case this practice has globally succeeded, for example, a positive result gained in Turkey. Financing with guarantee of such a fund has risen annual economic growth in the neighboring country to 5%", J. Ibrahimli said.

However, the expert believes that the loans guaranteed by the Fund must be strictly controlled: "Financing unnecessary and risky projects should be avoided as the loans are guaranteed by the state. Otherwise, this warranty mechanism may form additional burden on the state budget and financial system in the future".