The Azerbaijan Agriculture Loan Evaluation System (AzALES) was developed by the EBRD and the Frankfurt School of Finance and Management, with support from the European Union (EU). The system covers all commercially viable crops and animal products in Azerbaijan and helps lenders to assess risk more effectively, process loan applications faster and improve small private farms’ access to finance.
During the AzALES kick-off meeting, Deputy Minister of Agriculture Seyfaddin Talibov mentioned that the development of a new mechanism started as of 2015 and the project was successfully completed. According to him, risk assessment in the agricultural sector is very important for financial institutions, and AzALES provides banks with these opportunities.
Ivana Duarte, Head of the EBRD’s office in Baku, said: “Offering banks a more efficient system for evaluating agribusiness loans will help improve services for the sector, which is often still considered to be risky, a perception that the new tool will help to address. The system is expected to leverage the positive effects of the reforms already being carried out in Azerbaijan’s financial and agricultural sector by the government.”
The EU funding was instrumental in assisting the creation of AzALES.
Simona Gatti, Minister Counsellor and Head of the EUD Delegation to Azerbaijan Cooperation Section, added: “AzALES comes at a critical point in time when the government of Azerbaijan deploys important resources to modernise the agricultural sector as part of its economic diversification strategy.
“The success of many of the initiatives inscribed in the government roadmap for agriculture and indeed EU-supported activities in this sector hinge on improved access to agricultural credit notably by smaller and medium-sized rural operators.”
AzALES will be centrally operated and maintained by Azerbaijan’s Agency for Agricultural Credit and Development under the Ministry of Agriculture and will be available to the entire financial sector in the country.
It will enable financial institutions to:
• benefit from centralized and reliable agricultural data, increasing efficiency and transparency and reducing costs;
• disburse agricultural loans in a more systematic way;
• lend the amounts on terms and conditions that will prevent over-indebtedness.
The technical assistance funds of the project are provided by the EU Neighborhood Investment Facility.
The technical assistance services within the project are provided by Frankfurt School of Finance and Management.