Orkhan Mammadov: Entrepreneurs in Azerbaijan prefer preferential loans

The volume of loans issued to small and medium-sized businesses in Azerbaijan increased by 19% compared to the beginning of the year, to 5.3 billion manats ($3.117 billion), Orkhan Mammadov, chairman of the Board of the Small and Medium Business Development Agency (SMBDA) under the Azerbaijani Ministry of Economy, said at a meeting of the heads of Turkish and Azerbaijani financial organizations in Baku, Report informs.

Mammadov noted that most of this amount, namely 4.6 billion manats ($2.705 billion), was issued from the banks’ own funds.

According to him, the analysis of applications received by the agency and surveys conducted showed that most business entities prefer preferential bank loans as an external source of financing.

He reminded that initiatives are regularly implemented in Azerbaijan to support the financial needs of entrepreneurship: “The results of the reforms, along with other authoritative reports, are reflected in the SME Policy Index report published by the Organization for Economic Cooperation and Development (OECD) in 2021.”

“According to the International Finance Corporation, developing countries have identified a financing gap of $5.2 trillion in the form of unmet demand for formal financing of small and medium-sized businesses. Despite that in the group of countries that include Azerbaijan and Turkiye, deficit indicators finance is lower than in other groups - 15%, in order to achieve sustainable economic growth, it is very important to achieve an increase in business lending rates,” Mammadov said.