Azerbaijan has significant energy resources, but falling oil prices and a declining currency are quickly impoverishing its people. Income distribution is also very skewed: more than one-third of the population are employed in agriculture, yet the sector accounts for less than 6% of the economy. Making matters worse, financial services are extremely scarce, with 2 out of 3 adults lacking access to a basic bank account.
Founded in 1998, FINCA Azerbaijan currently serves more than 77,000 people, offering individual, small group, agriculture and SME loans throughout 35 urban and rural locations. FINCA Azerbaijan is the largest non-bank credit organization in the country and was the first microfinance institution to receive a license from the National Bank.
Reaching the Financially Excluded
Financial exclusion in Azerbaijan is high by regional and global standards. While attending to this widespread shortage of financial services, FINCA Azerbaijan also stands out for its impressive outreach to rural areas, home to about two-thirds of its borrowers. Financial services allow farmers to purchase inputs and equipment during the growing season. They also provide much-needed cash flow so that families can subsist between harvests.
Quality of Life
In most respects, FINCA borrowers in Azerbaijan enjoy comparatively good living standards, especially in the areas of home ownership, education and electricity. In all of these indicators, they are on a par or better than their peers in the region.
There is one glaring deficiency in the quality of life in Azerbaijan: the lack of potable water. About 28% of FINCA’s borrowers live in homes without running water. This incidence is likely related to the fact that so many of FINCA's clients are in rural areas, where this basic necessity is sorely lacking.
Income & Employment
Income & Employment
FINCA’s clients in Azerbaijan have 40% higher annual sales and earn 30% higher yearly profits than their counterparts in the region. Each enterprise funded by FINCA creates employment for 1.8 workers on average (including the owner), accounting for 146,662 people country-wide. FINCA's impact on job creation in Azerbaijan is high: two-thirds of total employment in our clients' businesses – nearly 96,984 people in total – is attributable directly to the loans they received from FINCA. About 90% of the people are earning wages that are above the national poverty line.
Women make up about a quarter of FINCA's borrowers in Azerbaijan. The majority of them are the principal breadwinner in their family. Of these women, more than half are single parents. Outreach to these households is extremely important for FINCA's mission, as women are traditionally the most vulnerable to long-term poverty.
Facing these challenges, we have found that our female clients in Azerbaijan are holding their own in terms of business creation. A good majority own their businesses. About a third create jobs in their communities, showing that their distribution across economic sectors and their potential to build livelihoods is similar to men.
Attaining Business and Personal Goals
More than half of FINCA’s borrowers in Azerbaijan aspire to expand their existing businesses. The vast majority of borrowers in Azerbaijan reported owning a home and about a quarter of all clients cite home improvement as their main aspiration.
Clients who reported business-based aspirations express the greatest confidence about meeting their goals, while those who reported home improvement or education are somewhat less secure that they will fulfill these aspirations.