Reasoning and objective for the Registry

The lack of an integrated movable asset registry in Azerbaijan particularly limits SME access to credit by offering movable assets as collateral.

The World Bank reports that out of SME assets in Azerbaijan only 22 percent are land and property, while 34 and 44 percent are accounts receivable, and plant and equipment accordingly. In contrast, creditors are more inclined to accept land and property as collateral, accounting for 73 percent of total pledge, with movable assets constituting as little as 27 percent. Azerbaijani banks prefer real estate as collateral, which severely limits access to finance for businesses. Hence, as most SME's do not have real estate to offer as collateral, e.g., land, they are either disinterested in seeking secured loans or simply cannot afford to.

Although the law clearly stipulates security interest in both immovable and movable assets, in reality banks seldom grant loans against movable assets other than cars and securities. An SME survey in Azerbaijan has demonstrated that SME's would prefer loans requiring less collateral and simpler underwriting procedures. SME surveys designed to examine their reluctance to apply for loans have shown that there are two major factors here: the complexity of application and underwriting procedures, and the high collateral requirements.

The Registry has been established as a way of improving access to finance for SME's by offering movable assets as collateral. The Registry will provide financial institutions with transparent, centralized information about SME's movable assets, allowing banks to verify whether the collateral they have been offered already carries any charges elsewhere. The Registry will also enable the banks to pick and choose from better collateral available at the secondary market. Furthermore, the Registry will also allow banks to dispose of an insolvent business' collateral without too much difficulty.


About us

Presidential Decree No.1138 of December 6, 2016 approved and enacted 12 strategic roadmaps for the national economy and key economic sectors, including the Strategic Road Map for Small and Medium Enterprise Production of Consumer Goods in the Republic of Azerbaijan (Strategic Road Map).

Priority tasks 2.3.1 and 2.3.2 of the Strategic Road Map discuss improvements to the movable asset laws and regulations and establishment of a movable asset registry.

Consequently, the Law of the Republic of Azerbaijan (No.667-VQ, May 2, 2017) “On movable asset encumbrances» was enacted, identifying an integrated, uniform legal framework for movable asset encumbrance, exercise of powers by pledgees, charge and lien holders, claims on movable assets, maintaining and using a state registry of movable asset encumbrances and related matters.

Presidential Decree No.1420 of May 24, 2017 tasked the Financial Market Supervision Authority of the Republic of Azerbaijan with the role of operating the state registry of movable asset encumbrances as identified under the Movable Asset Encumbrances Law.

The State Registry of Movable Asset Encumbrances has been operational since March 15, 2018.