Azerbaijan eyes to attract loans from ADB, EBRD

The Azerbaijan Entrepreneurship Development Fund (EDF) plans to attract financing from the Asian Development Bank and the European Bank for Reconstruction and Development (EBRD) in a few years.

“However, we do not expect big funds from these financial institutions. We consider the fund's liquidity as adequate. Cash and state securities account for about nine per cent of the fund’s total assets in mid-2022,” Report informs citing the S&P Global Ratings, which assigned SIF long-term and short-term issuer credit ratings of "BB-/B".

The fund’s main source of income is one per cent interest income on loans to financial institutions, which is supposed to cover its operating expenses. An additional source of income is short-term investments in local government bonds and interest income on cash accounts in other banks.

Moreover, the fund issues loans in Azerbaijani manats at one per cent interest rate to about 40 local operating commercial banks and credit unions for further lending to entrepreneurs at five per cent, which is well below market rates and allows entrepreneurs to borrow at affordable rates.

The fund finances itself through capital, while new loans are funded through repaying the main amount of the debt and interest repayments on maturing loans, as well as the fund's own capital.

Thus, the fund's assets reach 828 million manats ($487 million) as of mid-2022.