The government plays a crucial role in supporting entrepreneurship through financial mechanisms, especially for small and medium-sized businesses. In Azerbaijan, the Entrepreneurial Development Fund's financial mechanisms are key tools for implementing government policies aimed at strengthening the business environment. The preferential loan mechanism, in particular, is one of the main financial tools used by entrepreneurs to grow their businesses. In 2024, the number of entrepreneurship entities benefiting from this mechanism has significantly increased.
Increase in the number of entrepreneurship entities benefiting from subsidized loan funds
In 2024, the number of entrepreneurship entities provided with preferential loans by the Entrepreneurship Development Fund increased by 74.7% compared to 2023, reaching 5,722. The amount of loans granted also grew by 28%, totaling 248.1 million azn.
Subsidized financing of priority sectors of the economy
For the efficient allocation of the Fund's resources, priority areas for 2024 were determined, including industry (including agro-processing), agriculture, logistics, warehouse complexes, tourism, fishing and aquaculture (including aquaponics), green projects, media development, healthcare, education, and service projects. Of the total amount of preferential loans provided by the Fund, 53.3% was allocated to the production of agricultural products, 38.1% to the production and processing of industrial products (including agro-processing), 6.1% to services, 2.1% to tourism, and 0.4% to fishing and aquaculture.
Support for micro, small, and medium enterprises
Access to preferential financial resources is crucial for ensuring the resilience and development of micro, small, and medium-sized enterprises (MSMEs). The support mechanisms implemented by the state in this area provide favorable financing opportunities for these entrepreneurs, encouraging them to expand their business activities. In 2024, 99.8% of the projects financed by the Fund and 93.4% of the allocated preferential loan amount were directed towards micro, small, and medium-sized enterprises.
Support for entrepreneurial entities in regions
Preferential loans contribute to the development of entrepreneurship, the creation of new jobs, and the growth of economic dynamics in the regions. In 2024, a significant portion of the state's preferential funds was allocated to projects serving the development of regions. Specifically, 94.7% of the projects financed by the Fund through preferential loans and 72% of the total loan amount were directed towards regional development.
Support for entrepreneurial entities in liberated territories
Last year, significant attention was given to restoring economic activity in the liberated areas and accelerating investments in these regions. Starting in February, under the "Support for Entrepreneurs Operating in the Liberated Areas" mechanism, state guarantees were provided for up to 90% of the loans obtained by entrepreneurs implementing investment projects in these areas from banks and non-bank credit institutions. Additionally, the annual interest rate of these loans was subsidized by the state for up to 10 percentage points over a period of up to 36 months, with a grace period of up to 36 months, not exceeding half of the loan term. In 2024, based on the applications of entrepreneurs for the guarantee-subsidy mechanism, state guarantees totaling 19.2 million azn were issued for loans of 23.4 million azn across 12 projects. Moreover, a subsidy of 6.2 million azn was confirmed for these loans. The projects financed through this mechanism by the Fund covered sectors such as industry, services, tourism, and agriculture. These projects are operational in Shusha, Khankendi, Aghdam, Jabrayil, and Khojali, contributing to the economy.
In addition, the "Electronic Credit and Guarantee" information system has been made available to entrepreneurs to ensure the operational acceptance of applications for the aforementioned mechanism. Entrepreneurs now have the opportunity to submit their applications through the electronic information system without visiting any credit institution.
Alongside the guarantee-subsidy mechanism, support measures through concessional credit mechanisms have continued to stimulate entrepreneurial activity in the liberated areas. Over the past year, a total of 8.1 million azn in concessional loans were granted from the Fund for 3 projects implemented in these regions.
Promotion and awareness of entrepreneurial entities
In 2024, the Fund continued its awareness-raising efforts to increase entrepreneurs' access to financial resources, primarily through regular meetings with entrepreneurs in the regions, where detailed information was provided about the state's concessional financial mechanisms. The organization also participated in nearly 10 exhibitions and conferences organized by both state and private entities.
In order to expand the activities of entrepreneurs involved in industry, including the processing of agricultural products, as well as those implementing green projects, a "Support for Industrial and Green Projects" competition was held among the representatives of authorized credit institutions cooperating with the Fund. As part of the competition, nearly 66 million azn in loans were provided to 311 projects from the funds of the Entrepreneurship Development Fund in 2024.
Thus, in 2024, business entities operating in priority sectors of the national economy, including those contributing to the restoration of the liberated territories, were supported by the state's concessional financial mechanisms.
