Azerbaijan's AccessBank eyes creating new lending line for SMEs, individuals

By Trend

The total loan portfolio of Azerbaijan's AccessBank amounted to 765 million manat ($450 million) as of September 2022, Chairman of the Board at AccessBank Davit Tsiklauri told Trend on October 18.

According to Tsiklauri, this indicator increased by 25 percent.

"Our loan portfolio is divided into micro, retail, small and medium business segments. We are leaders in Azerbaijan’s micro-agricultural lending market with a portfolio of nearly 475 million manat ($279.4 million). A third of our microloan portfolio or 175 million manat ($102.9 million) falls on agricultural lending," he said.

The board chairman noted that the bank serves a number of large and medium-sized business entities.

"AccessBank began to develop lending to individuals starting from last year and about 20 percent of our portfolio, which is around 150 million manat ($88.2 million) falls on their share. Moreover, the bank is one of the active banks in attracting deposits from individuals," Tsiklauri stated. "We are also planning to create the necessary environment for the individuals so that they not only open deposits in our bank and take loans in cash but also carry out all the necessary banking operations namely with us.”

“Our loan portfolio is increasing in annual as well as in quarterly and monthly terms. The size of our portfolio has grown by nearly 40 percent in August 2022 compared to the same month of 2021. I think that demand for lending will continue to grow until the end of this year and won’t decrease in 2023,” he also said.

“We don’t see any risks in the local market which could affect small business lending in the near future. Of course, we attentively observe global macroeconomic and geopolitical situations which change almost daily, and as the number of external risks increases, we’ll adapt our strategy," the board chairman explained.

Tsiklauri pointed out that AccessBank issues 5,000-7,000 microloans (worth no less than 10,000 manat or $5,880) monthly.

“Our bank has 29 branches throughout the country and the issuance of 7,000 loans per month is a very high indicator. We are very active in the regions of the country. For example, according to our estimates, 50-60 percent of the market share of micro-credit falls on AccessBank branches in the regions of Azerbaijan, and 20 percent - in Absheron," he further noted. "To implement this and a number of other tasks, the AccessBank team carries out internal and external optimization and digitalization of processes.”

Besides, the board chairman said that AccessBank's non-performing loans (NPLs) which remained since the devaluation period will be reduced to the minimum level by the end of 2022.

"All of us remember the devaluations in 2015-2017, and the period of business activity drops during the COVID-19 pandemic in 2020. Most of the NPLs on the balance sheet of our bank fall during these periods. We are actively working with the clients, who faced problems in 2015-2017 and during the pandemic," he also noted.

"It's noteworthy that our bank's portfolio of NPLs began to decrease starting from 2019 and decreased by almost three times. All banks are making great progress in resolving the issue of NPLs, and I believe that this is facilitated by the stabilization of the economy and the good macroeconomic indicators of Azerbaijan," Tsiklauri said.

Speaking about the bank’s plans for the future, he stated that it’s planned to create a new line of lending to micro businesses and individuals, and carry out work on the further digitalization of processes and banking services.

“Moreover, we’ll work to improve our digital communication channels with clients. The bank's specialists are working on simplifying and automating the process of issuing microloans for private entrepreneurs and loans for individuals,” he explained. “We have done a great job in this direction and it will continue in the future because electronic services require constant updating and modernization of processes.”

“Along with projects on the automation for business clients, work is underway on the digitalization of banking services and products for individuals. We have mobile and web banking for the private sector,” the board chairman noted. “We periodically work on upgrading functionality and capabilities. Besides, our specialists have developed a strategy for the development of digitalization of banking services for individuals, including, the provision of alternative service and support channels.”

“In the coming year, we expect that all those service channels that we consider necessary for individuals will be fully provided by us," he added.

Summing up, Tsiklauri noted that AccessBank constantly works on improving payment products.

“The bank together with its processing partner carries out relevant work to launch Apple Pay and GooglePay payment solutions as soon as possible. The processing center that the bank is working with is setting up appropriate infrastructure so that we could fully provide this service to the bank's clients. I think that in the first quarter of 2023 this work will be fully completed both by our partner and by AccessBank itself," he concluded.