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business consulting

international development aid

IMPLEMENTED PROJECTS >  Support to Rural Banking: Establishment of an Agricultural Credit Institution

  • Country – Azerbaijan
  • Donor – Tacis
  • Duration – 2 phases, 42 months in total
  • Status – completed

The project established a non-banking financial (credit) institution (Rural Investment Foundation) which manages the lending from the Counterpart funds worth of 16 Mio. EUR to the targeted rural operators and operates as economically sustainable institution and according to prudential banking rules.

The technical assistance objectives were as follows:

  • design and establishment of the bank internal structure and corporate governance function;
  • development and introduction of new credit products; draft lending criteria and procedures and support their implementation;
  • development of a business strategy to achieve sustainability of the new institution;
  • training of bank staff in credit appraisal, supervision, credit portfolio management and risk management;
  • obtaining banking license for Azerbaijan;
  • design and establishment of a branch network;
  • assistance to review and strengthening of risk management and internal audit system;
  • establishment and promotion of an Overdue Loan Collection Agency.

In the second phase the project had as major objective upgrading and transformation of the established Rural Investment Foundation into a fully licensed bank. The technical assistance objective was to assist in reviewing the institution’s internal structure and organisation, products and services and adapt them to the new role and functions.

Main activities included:

  • development of a short- and medium-term business strategy and its implementation plan to achieve sustainability of the bank;
  • develop full range of banking products and support implementation within the new institution;
  • establishment of new audit procedures and strengthening of risk management department;
  • preparation of the privatisation of the founded Bank on international and national market.