President orders to create Credit Guarantee Fund

By Sara Israfilbayova

A Credit Guarantee Fund will be established in Azerbaijan to provide state support to entrepreneurs for broader access to financial resources.

President Ilham Aliyev signed on September 15 a relevant decree, according to which the Credit Guarantee Fund will provide a guarantee for entrepreneurs’ manat loans taken out in authorized banks.

The Fund will also provide subsidies on a part of the interest rate on loans in cases and the order determined by the head of state.

The Credit Guarantee Fund will have a Supervisory Board, consisting of seven people, as well as a Management Board.

The composition of the Supervisory Board will include a member of the Ministry of Finance, a member of the Ministry of Economy, a member of the Central Bank, a member of the Financial Market Supervisory Authority, a member of the State Oil Fund, a member of the National Confederation of Entrepreneurs (Employers') Organizations and a member of the Azerbaijan Banks Association.

The government of Azerbaijan makes huge efforts to stimulate business development in the country through introducing new privileges for entrepreneurs.

The main goal is to achieve rapid development of the non-oil sector, the formation of strong SMEs and ensure diversified, competitive and sustainable economic growth.

The National Fund for Entrepreneurship Support (NFES) is operating under the Azerbaijani Economy Ministry since 1992 to provide preferential loans from the state budget for small and medium business in an effort to develop entrepreneurship in Azerbaijan.

Moreover, Azerbaijani businessmen became eligible to get the investment incentives documents following the approval of amendments proposed to the Tax Code of the country.

Under the investment incentives document, half of the revenue of an individual entrepreneur, profits of legal entity are exempted from income tax for seven years. Import of equipment for the implementation of the projects is also exempt of VAT and customs duties.