Study of Small and Medium Enterprises in Azerbaijan - IFC

The charts above confirm that the entrepreneurs who find the lending terms restrictive
and expensive are at the same time often the very persons who never approached a
bank to borrow money.
The awareness campaign should thus go beyond an individual bank’s commercials
and must be focused on preparing a database that will offer comparative lending
terms, which are widely disseminated to the business community – through business
associations, for example. A collective effort is required with some leadership from the
relevant state authorities to bridge the communication gap between the two economic
sectors. Internet portals, booklets, specialized publications, and outreach to the
business community though the daily media are the usual means of communicating
economic reforms globally.
In addition, individual banks should be encouraged to undertake market research and
investigate their client profiles, including potential clients. Marketing activities of the
banks are still in an embryonic stage and clearly insufficient. To that extent, the public
sector may assist in organizing roundtables, seminars, trainings, and conferences that
bring the two sectors together and help to build a lasting commercial relationship.
Expected Impact
All this will help increase the quality of service and client satisfaction, leading to
further borrowing and a quicker turnover of the available credit funds, spurring greater
economic activity for the SME sector.
Improved banking services will in turn result in SMEs maintaining cleaner records
and operations, which adds to better tax compliance and improved revenues for the
public sector – a “win-win” strategy for every stakeholder in this field.
8.4.5 Set up a credit bureau
The country should move away from the incomplete state-run registers and move
towards setting up a full-scale, ideally privately managed credit bureau that would
include all the financial institutions.
Expected Impact
Implementation of the proposed measures will help promote in the medium and
long-run:
• Increase in the total volume of credit to SMEs;
• Real growth in number and turnover of SMEs;
• Improved conditions for financing, including: lower interest rates, longer
maturity periods, introduction of grace periods, and lessening of collateral
requirements.
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St u d y o f Sma l l a n d Me d i u m Ent e r p r i s es in Az e r b a i j a n