The agreement is part of IFC's efforts to help boost innovation and competition in Azerbaijan's financial sector. Measures towards this agreement are part of IFC's efforts to support Azerbaijan's banking system to become more resilient to the challenges posed by pandemics such as COVID-19, and will include the establishment of the infrastructure for digital financial services that can increase profitability and support growth of private companies, while also opening market for investments.
The work is led by IFC’s Electronic and Digital Financial Services Project, which is implemented in partnership with State Secretariat for Economic Affairs of Switzerland.
IFC will work with the Central Bank to create a regulatory sandbox, a special regime that allows banks and companies to test innovative financial services and products. The project will support improvements of instant payment system and allow customers to access banking services electronically, without having to visit bank branches, easing access to them.
“Electronic and digital financial services are important elements of a modern financial system and have acquired even more importance amid the pandemic,” said Jan van Bilsen, IFC Regional Manager for the South Caucasus. “Our joint efforts will support development of these services, enabling people and businesses to get those services faster, without leaving their homes, while also helping Azerbaijan's banking system modernize and open up for new investments,”
He noted that these services will benefit people with disabilities, especially in remote areas of the country where bank branches are not so available. The cooperation also aims to help raise public awareness of the digital financial services and enhance financial literacy in the country.
Azerbaijan became a member of IFC in 1995. Since then, IFC has invested around $473 million in the country, including $73 million through mobilization. Those funds have financed 56 projects across a range of sectors, including financial services, infrastructure, and manufacturing. In addition, IFC has supported around $100 million in trade through its trade finance program and provided $250 million for the Baku-Tbilisi-Ceyhan pipeline. IFC has also implemented a range of advisory projects aimed at encouraging private sector growth.