ADB evaluates need for financing MSMEs in Azerbaijan

Micro, small, and medium-sized enterprises (MSMEs) finance gap in Azerbaijan is more than $6.8 billion, Report informs referring to the Asian Development Bank (ADB).

“MSMEs are a critical contributor to income and employment, with more than two-thirds of the economically active population and more than 75% of women engaged in MSMEs. However, despite their economic and social significance, access to financial resources for MSMEs remains limited as they are less able to obtain bank loans than large firms,” reads the message.

In 2020, MSMEs comprised 99.7% of the total number of enterprises, with a considerable proportion (43% of total MSMEs) operating in rural areas.

Women are an active part of Azerbaijan’s private sector, with 226,000 women entrepreneurs representing 21% of all registered entrepreneurs. In agriculture, forestry, and fishing, female entrepreneurs represented 38.1% in 2022.

“Financial inclusion remains a challenge and women are in a more precarious financial position than men in terms of financial literacy, use of insurance services, and owning a bank account. Limited access to finance is also a barrier that women face in starting or scaling up their businesses; women made up only a quarter of financial institution funding recipients,” reads the report.

“This is partly because of lower rates of property ownership among women, which makes it more difficult for them to obtain credit secured by collateral. Providing unbiased information to women on the costs and benefits of financial services would help improve their financial inclusion,” the ADB noted.