EBRD: AzALES system to help banks improve service quality

By Azernews

By Leman Mammadova

The new system of agricultural loan assessment, AzALES, will play major role in the modernization of agriculture and facilitating access to credit resources in Azerbaijan.

The European Bank for Reconstruction and Development (EBRD) expects more lending opportunities for farmers and agricultural companies due to the new agricultural loan assessment tool, the Bank said in a message.

AzALES was developed by the EBRD and the Frankfurt School of Finance and Management with the support of the European Union (EU).

The system helps lenders more effectively assess risks, process loan applications faster and improve access to finance for small private farms, says the EBRD.

EBRD expects the new system will use positive results of reforms already carried out by the government in financial and agricultural sectors.

“Provision of a more efficient loan assessment system for agribusiness to banks will help improve the service quality for the sector that is still often considered risky,” said Ivana Duarte, Head of the EBRD's office in Baku.

The new loan assessment system was presented to the country’s credit organizations on September 5. About $200,000 was spent on the creation of the system.

AzALES will be centrally operated and supported by the Agency for Agricultural Credits and Development under the Ministry of Agriculture.

The system will be available to all financial sector of the country. AzALES will allow financial institutions to use centralized and reliable agricultural data, increasing efficiency and transparency and reducing costs, as well as systematically pay agricultural loans, issue loans on conditions that will prevent excessive debt.

In addition, AzALES will be able to track the reasons for the rejection of farmers’ applications to credit organizations.

Agriculture is one of the main sources of livelihood in the regions, 36 percent of the active labor force is employed in this sector of Azerbaijan. The agricultural sector accounts for about six percent of GDP, and taking into account the agro-processing industry, it exceeds 10 percent.

EBRD maintains a strong focus on Azerbaijan’s agricultural sector. Since 2013, the Bank has provided about 50 million euros of financing to various agribusiness firms in the country.

The EBRD is one of the leading institutional investors in Azerbaijan, where it focuses on supporting efforts to diversify the economy and develop the private sector.