Azerbaijan - Country Commercial Guide
Banking and Finance

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2022-07-30


The financial sector in Azerbaijan is dominated by banks, which hold about 95% of financial sector total assets.  The non-banking financial sector, particularly the micro-finance sector, is underdeveloped and suffered significantly following the multiple currency devaluations in 2015. .  19 banks were closed in 2016 because of non-performing loans, poor asset quality, lack of liquidity, and the overall economic downturn.  An additional four banks were closed in 2020 after the Central Bank took over financial market supervision from a formerly independent regulator.   Azerbaijan’s largest bank, the International Bank of Azerbaijan, is majority-owned by the Azerbaijani government and underwent restructuring in 2018.  Companies complain that strict credit terms limit access to medium- and long-term financing, constraining private businesses.  Despite several government initiatives, the credit supply available to small and medium enterprises remains limited.

Banks’ assets declined by 2% in 2020 to AZN 32 billion ($18.8 billion), and bank liabilities declined by 2% to AZN 27.3 billion ($16 billion). Banks’ assets increased by 20% in 2021 to AZN 38.5 billion ($22.6 billion), and bank liabilities increased by 19% to AZN 33.5 billion ($19.7 billion).  Deposit dollarization feel 10% since end of 2019 to 51%.  Banking sector capital totaled AZN 4.96 billion ($2.91 billion) at the end of 2021.

Despite publicly dropping the exchange rate corridor in 2017 and officially allowing the manat to float, the Central Bank has not introduced a genuinely floating exchange rate.  Since April 2017, the dollar-manat exchange rate has held steady at 1:1.70.

Leading Sub-Sectors

Financial and wealth management, trade finance, working capital, and lending represent the best prospects for new business development.  Demand for microfinance is also increasing, with very few lenders in place.  Leasing in Azerbaijan is in its infancy but is a promising vehicle for business financing in this developing market.  The best prospects in leasing include manufacturing equipment, farm machinery, medical devices, and transportation.


Many Azerbaijani banks have expressed interest in pursuing correspondent relationships with U.S. banks.  In addition, an increasing number of private banks are interested in attracting foreign equity investors.  The EBRD, IFC, and some German financial institutions have taken equity stakes in several such institutions.  The increasing wealth of Azerbaijan has also raised interest in financial and wealth management services.