Money Doesn’t Go Everywhere
I mentioned here that the money we’re using is coming from the World Bank. And that the project is geared towards agricultural activities. Because of that stipulation in the project, all of the credit unions that have started in Azerbaijan with the project are agriculture-based. Lending to people or organizations that aren’t related to agricultural isn’t in the cards right now. This was one of the top concerns about funding that Elçin, in Baku, had about their current projects. They want credit unions to start finding money sources that don’t tie them down to agriculture alone.
The way I see it, there’s two ways to go with this. First, regarding the previous idea about finding a money source domestically, such as with oil and gas revenues, the money that comes from those sources could possibly be more flexible and apply to individuals and small businesses not necessarily associated with agriculture. I think that could be a strong area for growth if the opportunity arose for such a flexible funding source. And the role of credit unions throughout the country could expand very quickly, giving a much needed source of credit to many people and organizations. And it would make the task of expanding credit union activities much easier.
The second way this could go, however, is that instead of becoming credit unions that lend a more diverse borrowing group, they could become agricultural organizations that expand their services to include sharing information with farmers or being a resource for farmers beyond just money lending. There are a few organizations already that do agricultural outreach projects, such as trainings and extension projects, and I think it could be an interesting area for the credit unions to expand. The downside is that it limits the potential base of lenders to what they are currently working with.