Azerdemiryolbank of Azerbaijan received a 12-month loan worth USD 3 million from the ING Bank of the Netherlands. According to a press release on Trend Capital, the loan would support microfinance businesses in Azerbaijan. The release quoted Mr. Yusif Jabbarov, the Vice-Chairman of the Bank, as saying the stated loan was the first cooperation in micro-crediting between a Dutch bank and an Azerbaijani lending agency.
Azerdemiryolbank is a bank in Azerbaijan founded in 1989. It provides support to micro enterprises and start-ups offering a range of financial services which include current accounts, fund transfers, loans and advisory. As of July 2008, Azerdemiryolbank had a total asset base of USD 246.8 million, a gross loan portfolio of USD 184.2 million and a total equity of USD 40.4 million. It has 32, 819 active borrowers and 27, 786 savers. As of December 2007, its return on assets was 4.49 percent and return on equity was 26.78 percent. As per the release, Azerbaijan has borrowed USD 32.3 million worth of loan from foreign financial institutions for microfinance activities. Refer this MicroCapital story for details on one such loan provided by Swiss based responsAbility Social Investment Services Ltd.
The ING Group is a Dutch company providing worldwide financial services including banking, insurance and asset management to clients in more than fifty countries. In October 2004, ING set up ING Microfinance Support, a program based in the Netherlands, aimed at providing financial products and services for small businesses and private individuals in developing countries. ING has forged partnerships with many organizations to promote microfinance, namely with the Dutch organization Okiocredit and the United Nations Capital Development Fund. More details on ING’s microfinance activities can be found in this MicroCapital story. As of 2007, ING had a total asset base of EUR 1,313 billion.
Azerbaijan, located partially in Eastern Europe and Western Asia, is a country rich in mineral resources, mainly oil and gas. According to a World Bank study nearly 20 percent of Azerbaijan’s population lives in poverty. As a poverty reduction strategy, the World Bank has proposed increased focus on the non-oil economy and implementation of ‘pro-poor’ reforms. Refer this MicroCapital for more information on the diversification of Azerbaijan’s economy through the development of non-oil business sectors and expansion of small and medium enterprise sectors. The United Nations lists Azerbaijan as ‘very likely’ to meet the first of its Millennium Development Goals (i.e. reduce, by half, the proportion of population living on less than one dollar a day). Azerbaijan was also voted by the World Bank and the International Finance Corporation (IFC) as the top reformer for doing business. Refer this MicroCapital story for details.
By Bharathi Ram, Research Assistant
Additional Resources:
Trend Capital News Wire: http://capital.trend.az/index.shtml?show=news&newsid=1390563?=en
MicroCapital.org:
Dec 6, 2007: responsAbility Mikrofinanz-Fonds Loans $2.5m to Azerdemiryolbank
Sep 24, 2008: Azerbaijan named top reformer in doing Business
Oct 7, 2008: ERDB reflects on Microfinance in Azerbaijan
April 19, 2006: ING to expand Microfinance Investment Activity beyond India
World Bank- Azerbaijan
UN Millennium Development Goals – Azerbaijan
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