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Azerbaijani President urged banks to lend more to the real sector more

February 6, 2014

BAKU /.02.14/TURAN: Azerbaijani banks must realize their own social responsibility and allocate more loans into the real economy. This statement was made by President Ilham Aliyev at a conference on the implementation of government programs for socio-economic development of the Republic of Azerbaijan . "In recent years, Azerbaijan's banking sector has grown rapidly. It grew up and became strong. I believe that the time has come to allocate more financial resources to the real economy. Today it is not so. But one of the functions of banks is to give even greater impetus to the national economy," said the president. According to the head of the Centre to Promote Economic Initiatives Azer Mehdiyev, today the loan portfolio is by 40 percent generated from consumer loans. Risks associated with long-term lending and thirst for quick money push banks to be cautious on the issue of long-term lending, which form the basis of lending to the real sector. In addition, in the absence of free competition, banks that are close to a variety of monopolies are not interested in lending competitors. Against this background, the President's call to social responsibility is contrary to the principle of the market economy, said Mehdiyev. According to Wikipedia, the real economy is a set of industries that produce tangible and intangible goods and services, with the exception of financial credit and exchange transactions that relate to the financial sector of the economy. -15B -

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Source: Turan Information Agency (Azerbaijan)

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