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EU supports new tool to boost agricultural lending in Azerbaijan

September 6, 2019

Thanks to the new Azerbaijan Agriculture Loan Evaluation System (AzALES), developed with support from the EU and the European Bank for Reconstruction and Development (EBRD), the country’s lenders will be able to assess risk more effectively, process loan applications more quickly and improve small private farms’ access to finance.

The system covers all commercially viable crops and animal products in Azerbaijan.

Agriculture is one of the key sources of livelihood for the Azerbaijani community, with 36%of the active labour force working in the sector (mostly in rural areas).

However, as the EBRD states, difficulties in accessing long-term, reliable and affordable finance, especially for firms in remote areas or with no real estate collateral, are holding the sector back.

According to the EBRD, “offering banks a more efficient system for evaluating agribusiness loans will help improve services for the sector, which is often still considered to be risky, a perception that the new tool will help to address”.

The EU funding was instrumental in assisting the creation of the AzALES system.

Simona Gatti, Minister Counsellor and Head of the EU Delegation to Azerbaijan’s Cooperation Section, believes that the new system “comes at a critical point in time when the government of Azerbaijan deploys important resources to modernise the agricultural sector as part of its economic diversification strategy”.

The system will be centrally operated and maintained by Azerbaijan’s Agency for Agricultural Credit and Development under the Ministry of Agriculture and will be available to the entire financial sector in the country.

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Press release

 


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