25.10.2017

Decree on Establishment of Credit Guarantee Fund

On September 15, 2017, President of the Republic of Azerbaijan issued a decree on “several measures pertaining to state support in expansion of access opportunities of entrepreneurs to financial resources in the Republic of Azerbaijan” (“Decree”).

The Decree aims to expand access opportunities of entrepreneurs to financial resources in connection with implementation of decree of the President of Republic of Azerbaijan dated December 6, 2016 on “Strategic Road Map on perspective of national economy of the Republic of Azerbaijan”, promote entrepreneurship activity and establish a credit system based on risk allocation in financial sector.

According to the decree, “Credit Guarantee Fund of the Republic of Azerbaijan” OJSC (“Fund”) is established.

The Fund as a legal entity provides guarantee for credits taken by entrepreneurs in manat from authorized banks and subsidy for a certain part of interest accrued on respective credits in a manner and condition determined by the President of the Republic of Azerbaijan.

Supervisory Board (which comprises 7 persons who provide their duties on a public basis) and Management Board (which carries out day-to-day management) are established under the Fund.

The Composition of Supervisory Board shall be agreed with the President of the Republic of Azerbaijan. Supervisory Board consists of representatives from following bodies:

  1. Ministry of Finance (1 person)
  2. Ministry of Economy (1 person)
  3. Central Bank (1 person)
  4. Financial Markets Supervisory Authority (1 person)
  5. State Oil Fund (1 person)
  6. National Confederation of Entrepreneurs Organizations (1 person)
  7. Azerbaijani Banks Associations (1 person)

Pursuant to the decree, for functioning purpose of the Fund, a Working Group (which consists of its head and 7 members) to be established.