Azerbaijan Mortgage Fund at the National Bank of Azerbaijan February 9, 2007 - Baku

1. Azerbaijan Mortgage Fund at the National Bank of Azerbaijan February 9, 2007 - Baku Mortgage Market Development in Azerbaijan: Strategic Directions of the AMF

2. Content • Mortgage lending in the world • AMF foundation • First achievements & experiences • Adjustments & Broadening • SWOT • Strategic goals • Partnerships

3. Russia: 1+% $2 bln. in 2005 Kazakhstan: 5+%, $7 bln

4. Trends in Azerbaijan

5. AMF Foundation December 2002 The decision to develop mortgage credit mechanism June 2005 The Law “On Mortgage” September 2005 Azerbaijan Mortgage Fund December 2005 The statue and rules of AMF February 2006 The Standard requirements of AMF March 2006 The first mortgage loan and refinancing (on AMF terms) January 2007 The Decree on social mortgage mechanism

6. AMF Mission “The main purpose of AMF is to provide mechanisms for housing finance through long-term mortgage loans, as well as to facilitate attraction of local and foreign financial resources” Presidential Decree N339 Baku, December 22, 2005

7. Banks Insurers Appraisers Brokers AMF Notary Property Register Securities Commission Market Infrastructure

8. PR and education

9. Mortgage loans and refinancing

10. Streamlining & Adaptation • Amendments to legislation • Streamlining of procedures • less paper work • less documents needed • more flexible choice • Reduction of interest rates • Reduction of down-payment • Increase of loan maturity • Social Mortgage More affordable lending!

11. AMF Standard Terms * With MGF

12. Primary market development Sufficient official income Source of capital / Refinancing Affordable Housing Efficient banking services Foreclosure, Register

13. Secondary market Developed primary market Institutional Investors DevelopedFinancial markets Stable macro- economic env’t Enabling legal env’t

14. Strengths State support Involvement of banks High Demand of Population Rising income levels Weaknesses Lack of experience Low public awareness Long procedures SWOT Analyses Opportunities • Affordable housing programs • Regional expansion • International integration • Development new products • Guarantee Fund • Securitization • Privatization Threats • Limited funding • Misuse of resources • Rising housing prices • Low interest from market participants

15. Strategic Goals • Building an enabling legal environment • Development of primary market and its infrastructure • Reducing paperworks and formalities • Institutional development of AMF • Preparation for secondary market operations

16. Potential Areas for Technical Assistance • AMF institutional building and functional development • AMF and mortgage system legal framework • Streamlining mortgage registration procedure • Market research/analysis • Support the development of the mortgage market infrastructure

17. Potential Areas for Technical Assistance • AMF Legal Framework – Part 2 • Streamline the AMF’s standards and requirements   • Implement single closure • Strengthen foreclosure • Taxation • Draft legislation on MBS and their turnover • Draft legislation on savings and construction banks

18. Potential Areas for Technical Assistance • Market research/analysis • Identıfy Market Potentıal for new products • Set up a monitoring and forecastıng tool

19. Potential Areas for Technical Assistance • Support the development of the mortgage market infrastructure • Develop uniform standards in appraising and insuring • Implement mortgage credit registry • Develop single database system • Sımplıfy procedures and provıde transparency • Implement a wide-ranging mortgage awareness campaign • Hold an international conference and other professional events

20. THANK YOU! Azerbaijan Mortgage Fund at the National Bank of Azerbaijan Tel (99412) 5982008 Faks: (99412) 4935541 info@amf.az www.amf.az