The Transparent Pricing Initiative in Azerbaijan has published standardized pricing data from 11 institutions, representing nearly half a million active borrowers. Launched in 2009 the Initiative was delivered in partnership with the Azerbaijan Microfinance Association (AMFA) and sponsored by KfW. The Initiative was instrumental in instigating awareness and commitments towards responsible finance and pricing transparency among the industry actors.Microfinance in Azerbaijan
The Central Bank of Azerbaijan regulates banks and non-bank credit institutions. The Law on Non-bank Financial Institutions enacted in 2009 and the subsequent guidelines issued structured the regulatory framework of the Microfinance industry. Although there exists general legislation for consumer protection and rights, legislation covering truth-in-lending and specific Acts relevant to consumers of financial services have not yet been initiated. The Azerbaijan Microfinance Association (AMFA) is a key figure in promoting and advancing consumer protection and responsible finance among its members.
The Price Graph for the Azerbaijan microfinance market is relatively shallow with APR (int+fee+ins) ranging between 24% and 53%.
The vast majority of financial institutions included in the dataset calculate their interest rates using the declining balance method. Many of the institutions analyzed could improve their level of transparency when communicating their prices to clients by disclosing fees and charges on the client repayment schedules. Non-disclosure of fees impedes the ability of borrowers to compare products or to make informed choices about loan products.
|Institution||# Borrowers||Portfolio (US$)||Products||Transp. Index||Participating Since||Age of Data|
|Bank of Baku||59,500||123,214,000||4||70||2010-May||116 mos.|
|Caspian Invest||1,100||695,000||1||N/A||2012-05||91 mos.|