Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
Strategies of the Development of Entrepreneurship and SME
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Table 28.The structure <strong>of</strong> <strong>the</strong> credits issued by <strong>the</strong> NFSECredits Maximum amount [USD] PeriodMicrocredits Up to 1,176 2 yearsLow volume credits 1,176 – 3,5294 2 yearsMedium volume credits 35,294 – 117,647 3 yearsBig volume credits 117,647 – 1,176,470 5 yearsLarge-scale credits 1,176,470 – 3,529,411 7 yearsDistribution <strong>of</strong> <strong>the</strong> resources <strong>of</strong> NFSE on <strong>the</strong> sorts <strong>of</strong> credits in 2005-2007Sorts <strong>of</strong> creditsNumber <strong>of</strong>projectsShare inprojects[%]Amount <strong>of</strong>credits[USD million]Table 29.Share incredits[%]Microcredits 2,309 53.3 2.2 1.1Low volume credits 548 12.7 3.1 1.5Medium volume credits 357 8.2 8.5 4.3Big volume credits 995 23 103.1 51.5Large-scale credits 122 2.8 83.1 41.6TOTAL 4,331 100 200.0 100DirectionsDirection <strong>of</strong> <strong>the</strong> use <strong>of</strong> resources <strong>of</strong> NFSENumber <strong>of</strong>projectsShare inprojects[%]Amount <strong>of</strong>credits[USDmillion]Table 30.Share incredits[%]Industrial products 598 13.8 883.5 44.2Processing <strong>of</strong> agro products 113 2.6 330.6 16.5Production <strong>of</strong> agro products 3,262 75.3 55.5 27.7Tourism 59 1.4 15.0 7.5Service sector 297 6.9 7.0 3.5Mass – Media 2 1.1 0.6The credits distributed by <strong>the</strong> commercial banks <strong>and</strong> o<strong>the</strong>r local <strong>and</strong> internationalfinancial institutions (European Bank for Reconstruction <strong>and</strong> <strong>Development</strong>, Asian <strong>Development</strong>Bank, etc.) has very high rate (18 – 28% a year) <strong>and</strong> <strong>the</strong>y are issued with hard mortgageconditions. By one word, <strong>the</strong> existing credit system in Azerbaijan, credit rates, duration,conditions related to mortgage guarantee, <strong>of</strong>fered privileges are not satisfied business people,especially <strong>SME</strong>s in <strong>the</strong> country, <strong>the</strong> credits issued by <strong>the</strong> NFSE isn’t sufficient <strong>and</strong> not relevantto <strong>the</strong> increasing dem<strong>and</strong> <strong>of</strong> <strong>SME</strong>s. That is why <strong>the</strong> amount <strong>of</strong> <strong>the</strong> credits allocated by <strong>the</strong> statebudget to NFSE should be increased, <strong>the</strong> distribution mechanism <strong>of</strong> credits should be reviewed,<strong>and</strong> more simple <strong>and</strong> minimum bureaucratic mechanism should be established, <strong>the</strong> mechanismshould be transparency <strong>and</strong> conditions for corruption should be eliminated.109