The Azerbaijan Agriculture Loan Evaluation System (AzALES) was developed by the EBRD and the Frankfurt School of Finance and Management, with support from the European Union (EU). The system covers all commercially viable crops and animal products in Azerbaijan and helps lenders to assess risk more effectively, process loan applications faster and improve small private farms’ access to finance.

“Agriculture is one of the key sources of livelihood for the Azerbaijani community, with 36 per cent of the active labour force working in agriculture (most in rural areas). The agricultural sector accounts for around 6 per cent of GDP, and reaches above 10 per cent when agro processing industries are also included. The country has strong potential in agribusiness thanks to its variety of excellent crops. However, difficulties in accessing long-term, reliable and affordable finance, especially for firms in remote areas or with no real estate collateral, are holding the sector back,” said the Bank.

Offering banks a more efficient system for evaluating agribusiness loans will help improve services for the sector, which is often still considered to be risky, a perception that the new tool will help to address, according to Ivana Duarte, Head of the EBRD’s office in Baku.

The system is expected to leverage the positive effects of the reforms already being carried out in Azerbaijan’s financial and agricultural sector by the government.

AzALES will be centrally operated and maintained by Azerbaijan’s Agency for Agricultural Credit and Development under the Ministry of Agriculture and will be available to the entire financial sector in the country.

It will enable financial institutions to:

- benefit from centralised and reliable agricultural data, increasing efficiency and transparency and reducing costs
- disburse agricultural loans in a more systematic way
- lend the amounts on terms and conditions that will prevent over-indebtedness.

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