MICROCAPITAL BRIEF: Azerbaijan Microfinance Association Proposes Guarantee Fund for Agricultural Credits

The Azerbaijan Microfinance Association (AMFA), a trade group of 28 microfinance institutions, recently announced that it will explore the possibility of creating a guarantee fund to insure up to 80 percent of an entrepreneur’s agricultural loan. AMFA Executive Director Mr. Jhale Hajiyeva reportedly remarked, “We don’t want to build a large-scale fund trying to guarantee all types of agricultural crediting. In the first stage the AMFA management offers to focus on provision of Fund’s guarantees for loans for up to AZN 20,000 [USD 25,490] i.e. to support small-scale producers not able to obtain without it the access to credit.” This proposal awaits the sanction of AMFA founders’, after which the Association would start a detailed study of the project. Earlier in 2012, AMFA took steps to establish a similar insurance fund for agricultural loans, but the effort was stymied by a lack of technical support relating to the development of actuation mechanisms.

By Chioma Okwudiafor, Research Associate

About Azerbaijan Microfinance Association (AMFA)                         The Azerbaijan Microfinance Association (AMFA) is an organization with 28 members, all of which are microfinance institutions (MFIs) in Azerbaijan. AMFA started informally in the mid-1990s to help meet the economic requirements of internally displaced persons (IDPs) and began a formalized alliance that would become AMFA in 2001. AMFA’s three “strategic pillars” are: “innovative products and services, continuing education and industry expertise.” AMFA also offers advisory services on financial management for medium-sized and larger institutions.

Sources and Additional Resources:

ABZ News: Azerbaijan Microfinance Association to consider a project of a guarantee fund for agricultural credits in December http://abc.az/eng/news/main/69982.html

MicroCapital Story: June 21, 2012, “MICROCAPITAL BRIEF: European Fund for Southeast Europe, Azerbaijan Micro-Finance Association to Publish Financial Literacy Booklet                   https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-azerbaijan-micro-finance-association-to-publish-financial-literacy-booklet/

MicroCapital Story: March 12, 2012, “MICROCAPITAL BRIEF: Azerbaijan Microfinance Association Mulling Agricultural Credit Guarantee Fund”
https://www.microcapital.org/microcapital-brief-azerbaijan-microfinance-association-mulling-agricultural-credit-guarantee-fund/

MicroCapital Universe Profile: Azerbaijan Microfinance Association (AMFA)
https://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=Azerbaijan+Microfinance+Association+%28AMFA%29

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