Azerbaijan plans to expand subsidies for interest rates on bank loans

Azerbaijan is considering expanding the mechanism for subsidizing interest rates on bank loans, Azerbaijani Economy Minister Mikayil Jabbarov said in an interview with ITV and AZERTAC, Report informs.

He noted that this instrument is not new – it was first widely used during the COVID-19 pandemic and has proven its effectiveness.

"Today, we are once again returning to expanding this instrument. We want it to be applied not only in liberated territories or in specific sectors, but on a broader scale," the minister noted.

Jabbarov also stated that measures aimed at reducing or stabilizing logistics and transportation costs are being considered.

Furthermore, another initiative is being discussed, but a final decision has not yet been made: the possibility of using funds in companies' VAT accounts for other mandatory payments, particularly social contributions. He stated that this may reduce businesses' need for additional financing and expand their opportunities for development.

The minister emphasized that the country already has a number of effective business support tools in place, including investment incentive mechanisms that provide tax and customs benefits for priority sectors.

He also highlighted the extensive package of tax exemptions available in the liberated territories and the Nakhchivan Autonomous Republic.

According to Jabbarov, over 200 million manats ($117.647 million) in preferential loans are issued annually through the Entrepreneurship Development Fund, primarily to small and medium-sized businesses. The state also acts as an investor for large projects, shouldering some of the investment risks.