“Banks dominate the financial sector, but there is a growing need for products that will support the development of small businesses,”APA-Economics reports citing reports the Asian Development Bank (ADB).
It was noted that 95% of the financial sector in Azerbaijan accounts for bank assets. Four of the largest banks constitute 70% of these assets, and the largest among them is a state-owned bank.
ADB emphasized that although a large portion of loans provided by banks to small and medium-sized enterprises (SMEs) are secured, there is a noticeable lack of dynamic financial products that would support the expansion of SMEs in domestic and international markets. As a result, the share of SMEs in the country’s GDP in 2023 was only 18%.
ADB assessed the development of the capital market as weak, while evaluating the development of the insurance market positively: “The level of development of the capital market is also assessed as weak. According to data as of the end of 2023, the capitalization of the stock market was 4% in relation to GDP. On the other hand, Azerbaijan's insurance sector is growing. Based on indicators as of the end of 2023, the market’s assets amounted to approximately 1 billion US dollars. This is equal to 1.5% of GDP. Life insurance products form the main market share in the insurance sector.”
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