Environmentally friendly vehicle lending posts growth

10-09-2024

10 September 2024, Baku. Actively involved in discussions under way the Central Bank of the Republic of Azerbaijan as the key executing authority, contributes to boosting access to finance as part of the ‘Development of proposals regarding boosting access to finance for the acquisition of eco-friendly and safe vehicles’. This action is addressed in the ‘Road Map for 2024 on stimulating use of environmentally friendly and safe vehicles and improving infrastructure’ of the Commission on Business Environment and International Rankings.

Note that, the Central Bank made proposals regarding boosting Access to finance on the acquisition of eco-friendly and safe vehicles back in 2022 and took crucial actions in this direction. The Bank eased lending conditions for the acquisition of eco-friendly and safe vehicles in 2022 and adjusted regulations, which positively weighed in on the lending and insurance of the vehicles of the type in next periods. Those initiatives made the lending of the said vehicles more accessible.

As a result of the Central Bank’s regulatory exemptions the bank lending of electrical and hybrid cars has jumped by 8 times in terms of the number and by 6.5 times in terms of amount over 18 months since 2022. Consequently, whereas as of end-2022 electrical and hybrid cars accounted for 17.8% of the total car lending portfolio, as of end-June this indicator accounted for 59.9% of the same portfolio.

Note that, the ‘Stimulating use of environmentally friendly and safe vehicles and improving infrastructure’ sub-group of the Physical infrastructure Working Group of the Commission on Business Environment and International Rankings is led by the Azerbaijan Land Transport Agency  under the Ministry of Digital Development and Transportation (https://azranking.az/working-groups).