Despite being established in 1992, the active period of the National Fund for Entrepreneurship Support commenced only in 2002.
The re-structuring of activity of the National Fund for Entrepreneurship Support and the mechanism for concessional financing of investment projects of entrepreneurs was a significant milestone in the development of this financial institution owing to the approval of the “Statue of the National Fund for Entrepreneurship Support of the Republic of Azerbaijan” and the “Procedures for use of the funds of the National Fund for Entrepreneurship Support of the Republic of Azerbaijan” by the Decree No. 779 dated August 27, 2002 of Nationwide Leader Heydar Aliyev in order to remove problems encountered in use of soft loans provided at the funds of the state budget, to match the activity of the National Fund for Entrepreneurship Support within the priorities of development of Azerbaijani economy and objectives to be performed by stages, to strengthen state support to entrepreneurship and to expand this activity. . The application of these procedures played a very significant role in the provision of concessional loans.
Well thought-out and consistent reforms carried out by the President of the Republic of Azerbaijan Mr. Ilham Aliyev based on the contemporary economic conditions made an immense contribution to the economic diversification, provision of economic sustainability, balanced development of regions, as well as the attainment of the strategic development targets of the country. Meanwhile, public-private relations and non-oil sector development, incentives in the private sector, state support to agrarian sector, as well as to small and medium-sized businesses have always been in the spotlight.
Relevant decrees by the Head of the State signed during the past period (in 2004, 2005, 2006, 2009 and 2011 years) on improving the Fund's activities resulted in placement of concessional loans on more appropriate and targeted projects, as well as creation of favorable conditions for efficient use of concessional loans by entrepreneurship entities.
The National Fund for Entrepreneurship Support was abolished and instead the Entrepreneurship Development Fund public entity was established under the Ministry of Economy and the “Procedures for use of the funds of the Entrepreneurship Development Fund of the Republic of Azerbaijan” was approved by the Decree of the President of the Republic of Azerbaijan on “Improvement of the state support mechanism for entrepreneurship development in the Republic of Azerbaijan” dated July 31, 2018 in order to improve the support mechanism for entrepreneurship development, create new production and processing enterprises based on innovative technologies in the non-oil sector, ensure the financing of export operations, accelerate investments in the real sector and expand access to financial resources of business units operating in the private sector. The annual interest rate on concessional loans provided by the Entrepreneurship Development Fund was reduced from 6% to 5% to ensure more effective use of them. Furthermore, the credit limits for medium-sized loans was set as 50,001 to 1,000,000 AZN in accordance with the new procedures.
The application of the new procedures will form opportunities for expansion of entrepreneurs’ access to concessional financial resources and non-oil production and exports, reduction of production expenses and product cost, creation of new production areas and wider use of the state support mechanisms by the private sector.