14:39 - 6.04.2020

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April 6, Fineko/abc.az.  The interview with the Chairman of the Supervisory Board of "Bank Respublika"

 

Mr.Rahimov, could you comment on measures to mitigate the effects of the coronavirus pandemic on the economy of Azerbaijan, which were proposed by Minister of Economy Mikail Jabbarov?

Today, the whole world is faced with a very difficult situation, where every government must promptly make decisions related to both the health of their citizens and solving economic problems. Our government responds quickly to the constantly changing situation and takes the necessary measures to mitigate the effects of the pandemic.

It is very comforting that our government is ready to take unprecedented measures, such as allocation of 2.5 billion manats to the support program (3% of the country’s GDP).This program is the largest in terms of the ratio of expenditures to GDP in the post-Soviet area and in the region.

 

Regarding specific measures, I can note the most important, in my opinion, moments:

1. Wide coverage of the program, which includes 4 large sectors and 20 business areas, 300 thousand private sector employees, 290 thousand micro and private entrepreneurs, low-income population groups.
2. Preferences for entrepreneurs working officially.  For example, the process of “whitening” of salaries, begun long before the pandemic, will now serve as a good service to entrepreneurs who have managed to register their employees and their salaries. The state assistance will be primarily provided for those entrepreneurs. The program also includes a partial refund and exemption from certain types of taxes.
3. Reducing the credit burden of businesses affected by the pandemic by subsidizing of the loans interest. It is very important that these measures are taken in advance before the majority of clients delays loan repayments.
4. The social orientation of the program, which, in addition to stimulating entrepreneurs to preserve the workplaces, will also partially meet the expenses of citizens on electricity and education.
5. The program aims not only the current problems solving, but also on future development of the country. For example, support in issuing mortgage loans and subsidizing new business loans.

 

What other measures would you personally consider effective within the program?

As I have already mentioned, the program has a fairly wide range, covering key areas and directions. As a representative of Bank Respublika, which is actively involved in microfinance and supporting small and medium-sized businesses, I believe that the most affected sides of this crisis are micro, small and medium-sized entrepreneurs. Therefore, I hope that the support program will help their businesses to continue their businesses and avoid bankruptcy. While supporting the idea of the program oriented towards transparently working entrepreneurs, I would still recommend making some minor relaxations for micro clients as well. Basically, this sphere includes small entrepreneurs who run family businesses, most of which are exempt from taxes. In most cases they did not do any bookkeeping. I am sure that within this program it is possible to make the maximum number of micro-businesses fully transparent.

It was  said that the program is oriented for borrowers who repay loans on time. I would recommend that the program to be also applied to business customers who, at the time of the restructuring or subsidizing, completely repaid their outstanding debts.

In conclusion, I would like to say that banks are also ready to support customers affected by coronavirus pandemic. Currently, we are discussing possible measures to support these clients and we will promptly inform them about our decisions.