November 6, Fineko/abc.az. The World Bank Group, in a project led by IFC, signed an agreement today to help spur the development of digital financial services in Azerbaijan, part of an effort to fight poverty and drive economic growth in the country.
IFC, in partnership with the State Secretariat for Economic Affairs of Switzerland SECO, will be working with the Azerbaijan Banks Association, a national body that represents the country’s lenders. IFC will advise the association on how to develop a suite of modern digital financial services that will contribute to financial inclusion and modernization.
The collaboration aims to make it easier for individuals and small businesses, especially those in rural areas without bank branches, to set up savings accounts and secure loans. The project will also help raise awareness of digital and electronic products. This is important for Azerbaijan, where only 29 percent of people have an account at a financial institution, well below the average for Europe and Central Asia, according to the World Bank’s Financial Inclusion Data Global Findex.
“Technology has the potential to modernise the way people in Azerbaijan access financial services,” said Zakir Nuriyev, President of the Azerbaijan Association of Banks. “This partnership with IFC will help local financial institutions develop industry-leading products, allowing them to meet the fast-changing needs of their customers.”
The initiative, formally known as the Electronic and Digital Financial Services Project, is part of the broader World Bank Group strategy to help diversify Azerbaijan’s economy and spur economic growth, in this case through support for electronic and mobile banking services. Extending the reach of banking institutions to remote areas also delivers on the future promise and potenial of digital banking.
“By giving small businesses and enterpreneurs – especially those outside the oil sector – increased opportunities to access financial services, we can help them expand and create jobs,” said Aliya Azimova, IFC Country Representative in Azerbaijan. “That is key to fighting poverty and building a sustainable economy in Azerbaijan driven by non-oil private sector.”
The country recently introduced new rules allowing customers to open accounts distantly. The novelties aim to extend the reach of banking institutions in remote areas, helping Azerbaijan, among other reformers in the area, further advance along the path to digital banking.
Azerbaijan became a member of IFC in 1995. Since then, IFC has invested around $473 million in the country, including $73 million in mobilization. Those funds have financed 56 projects across a range of sectors, including financial services, infrastructure, and manufacturing. In addition, IFC has supported around $100 million in trade through its trade finance program and provided $250 million for the Baku-Tbilisi-Ceyhan pipeline. IFC has also implemented a range of advisory projects aimed at encouraging private sector growth.
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