Central Bank of Azerbaijan strengthens control over sale of goods by installments

Establishing the process of submitting data to the Credit Bureau by entities engaged in the sale of goods on credit in Azerbaijan will allow expanding the database in the future, the Central Bank of Azerbaijan (CBA) said in response to Report's request.

It is noted that in accordance with the civil legislation of Azerbaijan, "sale of goods on credit" means the sale of goods by installments.

"The failure to include information on installment debts in the database of the Credit Bureau of Azerbaijan may make it difficult to correctly assess the solvency of potential borrowers and ultimately adversely affect the quality of banks' loan portfolios.

After the discussions, agreements were signed between the Credit Bureau and a number of organizations involved in lending," the CBA said.

In recent years retail facilities have been actively selling their goods on credit. However, the borrower's debts to commercial facilities are not reflected in any database (including the database of the Credit Bureau), so by contacting the bank, borrowers can get the amount of money they need on credit. This may expose banks or non-banks to risk in the future.