RESPONSIBLE ENTREPRENEURSHIP VISION DEVELOPMENT AND ETHICS

Government support for entrepreneurship: case of Azerbaijan 439
Accomplishments in the area of entrepreneurship support
This section of the paper discusses financial, legal and organizational support for entre -
preneurship by government. It highlights reforms and specific assistance to SME`s since independence
and evaluates the impacts of the support.
Government financial support
In April 2001 Ministry of Economic Development (Ministry of Economy) was established
to govern and foster entrepreneurship and relationship with government in one hand. That
was starting point for financial support for entrepreneurs in Azerbaijan.
Azerbaijan National Fund for Entrepreneurship Support (ANFES hereafter) under the Ministry
provides financial aid to the development of entrepreneurship, especially small businesses
in order to increase employment. ANFES gives concessional credits between 5,000-10,000,000
manats with 5-7% interest rate up to 10 years throughout 60 banks and non-bank credit organizations.
But before 2009, there was also micro-financing up to 1,000 manats and only 6
banks were involved. However, government gets only 1% interest of loans and the remaining
portion of interest go to financial intermediaries (commercial banks).
Since October 13, 2011, limit on small loans increased to 50 thousand manats (its period-
3 years), medium-sized credit limit up to 500 thousand manats (5 years), large amount credit
limits increased to 10 million manats (10 years). Grace period for loans will cover the first
half cycle of the validity period of the loan (MERA, 2014a).
As of January 1, 2016, 1,754 million manats have been given to 30,044 entrepreneurs and
it is expected that at the end of 2016 it will reach 2 billion manats. In 2015, soft credits in
the amount of 248.5 million manats were given to 5,243 entrepreneurs, and as a result, 12,600
new job places created. In 2015, 110,000 new job openings had been created as a result of
these investments. Besides, 46 business forums were held in 2015 to train and provide financial
assistance to entrepreneurs (ANFES, 2016).
During the period of 2002-2014 years, 2,773 women entrepreneurs received soft loans of
55,5 million manats, which resulted in 3,460 new job openings. 1377 of these job openings
were created just in 2014 (MEAR, 2015). During 2015, 40% of the loans were from budget,
and the remaining 60% came from retained loans. Loans given to regions make up 64% of
the total. In order to address the problems of entrepreneurs in regions regarding collateral,
partnerships were established with 32 non-bank institutions to grant loans without collateral.
As a result of this partnership, loans in the amount of 53 million manats were granted to about
7 thousand farmers. In 2015 which was announced as the year of agriculture in the country,
5100 entrepreneurs benefited from soft loans in the amount of around 213 million manats
(www.president.az, 2016).
In 2014, total of 5,744 entrepreneurs’ loan applications (99.6% of the all applications) were
granted by ANFES through 39 authorized loan agencies. Total investment demand was 587,749
thousand manats, whereas the amount of approved application loans was 324,161 thousand
manats. 5,571 (96.6%) of all applications were directed to agricultural sector which was
255,606.5 thousand manats or 78.5% of loans during 2014 (ANFES, 2015).
Number of small-scale projects by entrepreneurs financed in 2014 were 5,637 (97.8%) compared
to medium-scale 60 (1%), and large-scale 68 (1.2%). However, the amount of funding
received by small scale entrepreneurs constituted only 20.5% (66,977 million manats), whereas