More concessional financing directed to agrarian sector

By: Vusala Abbasova

The National Fund for Entrepreneurship Support (NFES) under the Economic Development Ministry of Azerbaijan allocated concessional financing of more than 119.5 million manats (over $113.8 million) to roughly 3,400 entrepreneurs.

This statement was recently made by Shirzad Abdullayev, NFES Executive Director at the business forum in the Ismayilli region of Azerbaijan, which is devoted to granting concessional loans to business entities.

Abdullayev highlighted that more than 7,500 new jobs could be created from the allocation of concessional loans for investment projects.

A range of the investment projects has been financed in different regions of Azerbaijan for the first half of the year.

The NFES, which was established in 1992, financed 1,640 investment projects for entrepreneurs in the Mountain Shirvan economic region so far this year.

The total cost of these projects has been 57.5 million manats (over $54.7 million).

In the framework of the forum, concessional loans in the amount of 1.07 million manats (over $1.01 million) was allocated via authorized credit organizations to 59 business entities of the Ismayilli region.

The loans will help create more than 80 new jobs in grain farming, viticulture, livestock management, beekeeping, and furniture production.

The financing of agricultural businesses took the largest chunk of the concessional loans in Azerbaijan, helping create 5,618 new jobs.

The NFES spent 65.5 percent of the total volume of concessional financing for production and the processing of agricultural products for the reported period.

A total of 63.73 million manats (over $60.72 million) was allocated to finance 2,910 agriculture projects, including 63.67 million manats (over $60.66 million) to agricultural production and 56,000 manats (over $53,358) to implementing two projects in agricultural processing, the NFES on July 30.

The NFES allocated 19.99 million manats (20.6 percent of the total volume of concessional loans) to invest in five projects in the field of service sphere development, which will provide for the opening of 232 new jobs.

For the reported period, 57 projects in the field of the production and processing of various industrial products were financed in the amount of 13.3 million manats (13.7 percent of the total volume of concessional loans). The implementation of these projects will create 716 new jobs.

More than 111 million manats (over $105 million) were lent to over 3,100 entrepreneurs since 2015.

Most of the loans allocated by the NFES were small loans totaling 32.83 million manats (99 percent of the NFES funding) for January-June 2015. The Fund gave 10 medium-sized loans in the amount of 2.07 million manats (0.3 percent), and 21 larger loans in the amount of 65.11 million manats (0.7 percent).

The state budget will provide 100 million manats (over $95 million) to the NFES in 2015. The additional funds are from 130 million manats (over $123 million) worth of loans repaid earlier. Thus, the volume of funds accumulated in the NFES will reach 1.747 billion manats (over $1,664 billion), including state budget allocations totaling 931 million manats (over $887 million) and repaid loans totaling 816.3 million manats (over $777.7 million).

The NFES allocates loans to entrepreneurs via authorized banks and non-bank credit organizations.

There are 42 banks operating in the country.

The official exchange rate is 1.0495 AZN/USD on July 31.