Azerbaijani President Ilham Aliyev recently signed a decree into law passed by the Azerbaijani legislature last December. The law aims to increase the access that citizens in rural regions have to financial resources, especially providing financial support for microentrepreneurs and strengthening the legal foundation for non-bank credit organizations (NBCOs).

The law creates a legal distinction between NBCOs that have the right to hold collateral and those that do not have this right. The law also provides licenses to NBCOs which allow the NBCOs to offer secured and unsecured loans for an indefinite amount of time.

The new law does not apply to nonprofit organizations and only allows international organizations to establish NBCOs if their country of origin has an agreement with Azerbaijan that specifically permits the establishment of internationally organized NBCOs.

By Eric McKay, Research Assistant

Bibliography:

Trend: “Azerbaijani President signs decree to execute law Non-bank credit organizations” by N. Ismayilova, February 9, 2010, http://en.trend.az/capital/banks/1635499.html