According to an article from the online publication, Azerbaijan Business Center, microfinance institutions (MFIs) that are members of the Azerbaijan Microfinance Association have reached a combined microloan portfolio of USD 393 million as of October 1, 2009 [1,2]. Additionally, the number of active borrowers has exceeded 274,600 [1].
The report was made up of 31 AMFA members across Azerbaijan [1]. The AMFA also calculated that of the total microloan portfolio, 3.32 percent qualify as “risky” [1]. AccessBank, a commercial bank in Azerbaijan focusing on Micro and Small Enterprises (MSEs), was the leading member of AMFA with a microloan portfolio totaling over USD 141 million [1,3,4].
The Azerbaijan Microfinance Association started informally in the mid-1990s to help meet the economic requirements of internally displaced persons (IDPs) [2]. In 2001, ten NGOs met to formalize this alliance into what would officially become the AMFA [2]. It now utilizes “knowledge management, policy advocacy, and technical services” to “[advance] the interests of the micro finance community” in Azerbaijan [5]. The organization has three “Strategic Pillars” through which it works to achieve this [2]. The first is “Innovative Products and Services”. The AMFA works to develop innovate products and services to help their members meet the demands of their clients [2]. The next pillar is “Continuing Education,” to ensure access to microfinance expertise and also develop “local talent” [2]. Lastly, the AMFA strives for “Industry Expertise” through “leading edge market research and benchmarking studies” [2]. In September of 2008, Microcapital reported on the “Azerbaijan Microfinance Analysis and Benchmarking Trends Report” released by the AMFA and the MIX Market, the microfinance information clearinghouse [6,7].
AccessBank was founded in 2002 [3]. It is a fully licensed commercial bank and therefore lends to “physical persons as well as larger enterprises and international organizations” in addition to MSEs [3]. It offers not only loans but also savings and payment services [3]. According to the MIX Market, its gross loan portfolio stands at over USD 207.1 million and it has 69,448 active borrowers [4]. As of the end of 2008, AccessBank has a return on assets of 6.83 percent, a return on equity of 44.28 percent, and a debt to equity ratio of 4.82 [4]. Microcapital has reported on AccessBank at various times in 2009 including a USD 15 million investment it received from the International Finance Corporation (investment arm of the World Bank) and its BB+ credit rating from Fitch, both taking place in April of 2009 [8,9].
The Economist Intelligence Unit (EIU), the research arm of the Economist magazine, ranked Azerbaijan the forty-ninth best country in the world for microfinance in its 2009 Microscope index [10,11]. It was ranked forty-third in regulatory framework, thirty-eighth in investment climate, and fortieth in institutional development [10]. The report does not provide detailed information as to why these rankings were received. In 2008, the twenty-two MFIs from Azerbaijan that reported to the MIX Market had a combined loan portfolio of over USD 835.4 million and 346,812 active borrowers [12].
By Christopher Maggio, Research Assistant
Bibliography:
[1] Azerbaijan Business Center entitled: ‘Portfolio of Azerbaijan Microfinance Association on microloans totaled $393 million’: http://abc.az/eng/news/corporate/39783.html
[2] Azerbaijan Microfinance Association: http://amfa.az/sehife.php?lang=eng&page=08
[3] Access Bank: http://www.accessbank.az/en/index.html
[4] Access Bank on the MIX Market: http://www.mixmarket.org/mfi/accessbank
[5] Azerbaijan Microfinance Association on the MIX Market: http://www.mixmarket.org/networks/amfa
[6] MICROCAPITAL STORY: Microfinance Information Exchange (MIX) Releases Reports With Central American Microfinance Network REDCAMIF and Azerbaijan Micro-finance Association: https://www.microcapital.org/microcapital-story-microfinance-information-exchange-mix-releases-reports-with-central-american-microfinance-network-redcamif-and-azerbaijan-micro-finance-association/
[7] The MIX Market: http://www.mixmarket.org/
[8] MICROCAPITAL STORY: International Finance Corporation (IFC) Investing USD 15m in Azerbaijan’s AccessBank to Expand Microfinance Services: https://www.microcapital.org/microcapital-story-international-finance-corporation-ifc-investing-usd-15m-in-azerbaijan%E2%80%99s-accessbank-to-expand-microfinance-services/
[9] MICROCAPTIAL STORY: Fitch Ratings Confirms Long Term Rating of BB+ for AccessBank in Azerbaijan: https://www.microcapital.org/microcaptial-story-fitch-ratings-confirms-long-term-rating-of-bb-for-accessbank-in-azerbaijan/
[10] Economist Intelligence Unit Global microscope on the microfinance business environment: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=2189221
[11] Economist Intelligence Unit: http://www.eiu.com/site_info.asp?info_name=about_eiu&entry1=about_eiuNav&page=noads
[12] Azerbaijan on the MIX Market: http://www.mixmarket.org/mfi/country/Azerbaijan/flatstore_mfi_mfdb_data.mix_diamonds__c%2Cbalance_sheet_usd.gross_loan_portfolio%2Cproducts_and_clients.total_borrowers/2008/
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