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Rural Finance Framework: Supporting Agrarian Credit and Development (ACDA) Agency’s Credit Operations - TCP/AZE/3805

Year of publication 2024

Place of publication Rome, Italy ;

Pages 8

Publisher FAO ;

Product type Project

Synopsis (short abstract) The total outstanding credit by formal financial institutions (banks and non-banks) to the agricultural sector increased by 80 percent between 2017 and 2022, resulting in a compound annual growth rate (CAGR) of 14 percent, as shown below. However, this growth has been increasingly eroded by inflation, as the growth rate decreases to 7 percent if deflated against the Consumer Price Index (CPI). Despite the increase in lending volumes, the share of agricultural loans in agricultural (gross) output and value addition (agri-GDP) has increased very little. Loan-to-output and loan-to-GDP ratios grew from 21 percent to 23 percent and from 11 to 12 percent during the last 5 years, respectively. This gives Azerbaijan a middling position among its regional peers – above the Republic of Moldova (17 percent) and Uzbekistan (20 percent), on a par with Georgia (23 percent), but below Türkiye (34 percent) and the Russian Federation (59 percent). At the same time, approximately 50 percent of the total formal lending into agriculture goes to legal entities, which only account for approximately 10 percent of the agricultural output.

Language English

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