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CBA: SMEs in Azerbaijan have low ability to create added value

Rustam Tahirov, Director of the Sustainable Development of the Financial Sector Department at the Central Bank of Azerbaijan

12 November 2025 14:37 (UTC +04:00)

The value-added creation capacity of micro, small, and medium-sized enterprises (MSMEs) in Azerbaijan is relatively low, said Rustam Tahirov, Director of the Sustainable Development of the Financial Sector Department at the Central Bank of Azerbaijan, during his speech at the “Asia SME Monitor 2025” seminar held in Baku, APA-Economics reports.

According to him, although the SME sector provides about half of total employment in the country, productivity indicators in this area remain low. This is related to the fact that employment is mainly concentrated in sectors that generate low value-added activities.

R. Tahirov noted that Azerbaijan’s financial system is mainly concentrated in the banking sector, and banks play a decisive role in the flow of credit to the real economy. Currently, MSME loans account for 20 percent of the total loan portfolio of banks and 47 percent of total business loans.

The Central Bank official emphasized that while this structure demonstrates the growing contribution of banks to economic activity, on the other hand, it shows that SMEs may face collateral and liquidity difficulties during credit cycles.

He added that strengthening banks’ capacity to assess and manage SME risks, as well as diversifying financial sources beyond the banking sector — toward capital markets and non-bank institutions — are among the Central Bank’s key policy directions.