TRANSPARENCY AND PROFESSIONALISM

Speeding up development in the agricultural sector is one of the most important aims of independent Azerbaijan. The head of state, Ilham Aliyev, has set the government the tasks of achieving complete self-sufficiency in the most vital agricultural produce, of organising various types of processing facilities capable of producing export-quality products in the next few years, and of creating various programmes to assist those engaged in agriculture. Within the framework of these documents infrastructure development in Azerbaijani villages has been stepped up, direct assistance is being rendered to farmers in acquiring machines and equipment and the conditions are being created for storing produce and exporting it.

The main priority in this respect is the granting of financial assistance by means of various tax concessions and preferential treatment, as well as easier access to the loans being offered by the National Fund Entrepreneurship Support Fund (ANFES). The Azerbaijani government is moreover helping to get contacts going between local rural entrepreneurs and their counterparts in other countries by organising their participation in international conferences and exhibitions in our country, so they can take advantage of latest experience abroad. A few months ago, with the involvement of government structures, two relevant conferences were organised by the Azerbaijani National Confederation of Entrepreneurs and International Institutions. Thanks to these events, agricultural production in Azerbaijan grew almost 3.3 times from 2003 to 2013, the sown area was expanded to 64,200 ha and the output of livestock products increased 3.8-fold. 

It has to be admitted that, in spite of all this, the agricultural sector still requires financial backing. This sphere of the economy is known to be the most risk-prone, so private banks and credit organisations are reluctant to subsidise the projects of entrepreneurs in the countryside. According to the statistics, loans for agricultural projects occupy the smallest share of local banks' portfolios. Therefore there is a dire need for financial organisations focussing solely on operations in the agricultural sector. At the present time, the only structure in the country which is performing these functions is "Aqrarkredit" joint-stock (JSC) credit organisation. 

It is noteworthy that this organisation is involved in many international financial projects aimed at developing the agricultural sector and is successfully working on granting loans to entrepreneurs and businesses operating in this sphere; it is helping to determine areas which most a financial top-up and their needs to be met. 

On the whole, throughout the entire period of "Aqrarkredit's activity, more than 9,593 entrepreneurial entities operating in rural locations have been granted loans worth a total sum of 63.1m manats.  Besides acting as a spur to growth in production, the processing of agricultural produce and rural infrastructure development, this has also created conditions for boosting employment in the regions.

In 2013 alone, "Aqrarkredit" granted loans from its own resources to 1,129 entrepreneurial entities and 904 groups of borrowers totalling 8.4m manats, including 4.7m manats for the development of animal husbandry, 0.7m manats for plant cultivation, 3.1m for the trade and service spheres and 0.1m for other spheres.

It is noteworthy that "Aqrarkredit" granted loans worth 3.2m manats to 341 entrepreneurial entities from financial resources provided to it by the National Entrepreneurship Support Fund. All in all, throughout the years that it has been operating as an authorised credit organisation of this fund, "Aqrarkredit" has provided 1,471 entrepreneurs with loans totalling 16.4m manats. 

The chairman of the "Aqrarkredit" JSC board, Mammad Musayev, has said that one of the strategic goals of the credit organisation is to act as an agent with relation to the agricultural projects being implemented in the country in line with targets of the Azerbaijani government and international financial organisations. Thus, within the framework of the project aimed at reducing poverty in the countryside, under way since 2009, with financial assistance from the International Fund for the Agricultural Development (IFAD), in 2013 "Aqrarkredit" granted loans totalling 5.2m manats to 1,507 entrepreneurial entities. The advantage of these projects is that there is no need for a deposit, which allows a large number of entrepreneurs to take advantage of these loans.

 "'Aqrarkredit's' main slogan precisely highlights its purpose, namely supporting agricultural entrepreneurs," the head of the board, M. Musayev, stressed.

Since 2011, with the help of its branch network, "Aqrarkredit" has started to provide micro-loans to agricultural producers. Moreover, the conditions for obtaining these loans have been maximally simplified and cut down to a minimum. The period for completing the official loan-related procedures has also been reduced to a minimum. Moreover, the loans are granted on the basis of guarantees, i.e. without requiring a deposit, in order to help the greatest possible number of entrepreneurs who need assistance.

It should be noted that, with the help of its 12 branches, "Aqrarkredit" covers almost all of the country's territory, including remote villages. Proceeding from the norms of the Central Bank of Azerbaijan, both from the rules at home, which were, by the way, recently revised to simplify them and reduce the risks, the real and personal estate of borrowers in rural localities can be offered as a deposit; this, in its turn, means that juridical and physical entities can gain greater access to loans.

 At the present time, more than 800 settlements and villages in 61 districts have availed themselves of loans. "Aqrarkredit" is acting as a participant and partner in many agricultural projects being implemented with financing from international organisations, in particular with the support of the government of Japan. Talks are also being conducted with several international financial institutions on accessing additional resources to expand the credit portfolio.

- The agricultural sector is known to be the most risk-prone sphere for bank loans. Are these loans getting repaid?

- I shall begin by noting that it is our aim to become a profit-making financial structure operating exclusively in the agricultural sector. JCS "Aqrarkredit" has at its disposal the necessary technical facilities throughout the country, a developed branch network and potentially well trained staff. As far as the repayment of loans is concerned, we regard the recent interest rate rise in this sphere as one of the main successes of "Aqrarkredit" over the period of its operations. I think that the main part in this case is played by the fact that, thanks to wage rises, the application of a system of incentives, installation of cutting-edge information technology, and improving management, we have succeeded in achieving a considerable improvement in the standard of the services rendered and we have got business-related partnership relations going with clients. Today I can say with confidence that "Aqrarkredit" has won great trust among regional entrepreneurs thanks to the transparency and professionalism of our operations, which, in its turn, acts as an even greater incentive for us to further improve our operation. 

Thus, JCS "Aqrarkredit" is making a definite contribution to fulfilling the extremely important task, set by President Ilham Aliyev, of boosting the agricultural sector's potential and ensuring the country's food security by providing additional financing to projects aimed at increasing agricultural output. Ultimately, all this will allow the global aim of reducing Azerbaijan's economic dependence on the oil and gas sector to be reduced, so that the country's export potential can be diversified and varied and, what is most important, will facilitate an improvement in the wellbeing of residents in the regions.