Entrepreneurship Development Fund of the Republic of Azerbaijan

Entrepreneurship Development Fund of the Republic of Azerbaijan ''(Az. Sahibkarlığın İnkişafı Fondu)'' public entity was established under the Ministry of Economy and the “Procedures for use of the funds of the Entrepreneurship Development Fund of the Republic of Azerbaijan” was approved by the Decree of the President of the Republic of Azerbaijan on “Improvement of the state support mechanism for entrepreneurship development in the Republic of Azerbaijan” dated July 31, 2018.

The main goal of the Entrepreneurship Development Fund of the Republic of Azerbaijan is to provide financial support to entrepreneurs in Azerbaijan by promoting best international practices in improving mechanisms of state support for entrepreneurship. EDF aims to support the creation of new production and processing enterprises based on innovative technologies for the development of the non-oil sector as well as an expansion of production and processing of import-substituting and export-oriented food and non-food products.

EDF has identified the priority directions in the economy of Azerbaijan to allocate its fund to support the development of the agricultural sector, non-oil industries, service-based projects, investment projects in liberated territories, tourism, education, healthcare, construction (machinery and equipment), digitalization, internet and telecommunication services, and startups. Furthermore, the EDF has adopted an assessment criterion which is taken into consideration during appraisal such as impact of innovative technologies, import substitution and export positioned, MSME category, ESG integrated projects and UN SDG factors that are being met.

Financial support mechanisms

Consequently, to play active role in sustainable development of entrepreneurship in Azerbaijan, EDF offers the following financial support mechanisms:

Soft Loan Mechanism

There are three types of soft loans: small, medium and large. Depending on the loan amount, the term of the loan can vary from 3 to 10 years. However, the interest rate is set at 5%, with grace period given up to half of the loan term.

Equipment Loan Mechanism

In this mechanism the EDF can finance up to 3 million manat with 9% interest rate and 5 years of term, additionally given the 12 months of grace period.

State guarantee & interest subsidy (for pandemic-affected businesses)

As part of measures taken to accelerate investment in pandemic-affected sectors and maintain employment in these areas, the EDF applied state guarantee financial mechanism to entrepreneurs on new bank loans and subsidized interest on these loans. Moreover, EDF subsidized interest to existing loans of the entrepreneurs to the date of 10.03.2020. Guaranteed amount covered 60% of the bank loan and 50% of interest was subsidized. The volume of the portfolio in this mechanism was 500 million manat. This mechanism expired in 2021. Concerning the interest subsidy of existing loans as of 10.03.2020 the volume of portfolio was 1 billion AZN.

Interest subsidy of loans (Anti-inflation measures)

Given the more challenging macroeconomic environment and higher inflation in the world, the Fund started to implement adequate and agile measures. In order to strengthen anti-inflation measures in the country, enterprises engaged in the supply, production and processing of basic food products will be subsidized up to 10% of the percentage of loans issued in 2022, regardless of the term and interest rate, up to 3 million manat with 12 months of subsidy term.
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