Central Bank of Azerbaijan (CBA) expects an easing of the lending policy of banks in the third quarter of 2022, Trend reports via CBA's survey.
Since 2022, the Central Bank has started conducting surveys among Azerbaijani banks on lending policy.
"Results of the survey show that banks continued easing lending policy in the second quarter and the trend of the first quarter remained. First of all, this is observed in business lending. An increase in demand for all types of loans was seen in the second quarter, with the exception of domestic mortgage programs," CBA stated.
According to Central Bank, the main factor affecting the increase in demand for loans is the need of companies for working capital, digitalization and change in consumer and mortgage lending rates.
"The easing of the credit policy trend on the part of banks will continue in the third quarter of the year. An increase in demand for all types of loans is also forecasted, with the exception of business loans in foreign currency. Banks note an increase in demand for loans from SMEs and, according to estimates, this trend will continue during the third quarter," CBA said.
CBA informed that the main factors in easing the conditions on business loans by banks in the second quarter were the increased competition between credit institutions and a liquidity position.
"At the same time, inflation, the discount rate and economic expectations were factors that tightened the lending policy of banks. For business loans in the reporting period, the greatest easing took place in terms of lending to small and medium-sized businesses: a decrease in the loan rate, margin, commission and loan guarantees. The easing for large businesses was the provision of loans at lower rates and lower margins on low-risk loans," Central Bank informed.