World Bank Project

The Development Credit Agreement (Project on development of Financial Services), signed between the Government of Azerbaijan and the International Development Association on May 24 2005, and approved by the President Ilham Aliyev on August 25 2005, sets before everything else, such supreme goals as to improving the living standards of the population, improving the quality of services and, finally, supporting the establishment of electronic government.

The Project aims to create favorable conditions for the development of financial services in Azerbaijan by utilizing the existing platform (departments and agencies, as well as other current and potential opportunities) of Azerpost LLC, to provide the population with free access to banking and financial services in rural areas and small urban centers, and to offer wide range of services to customers through local post offices. The Project's primary goal is to improve the access to financial services in rural areas and small urban centers, as well as to promote the development and economic growth by creating the critical business infrastructure. The Project's implementation enables the provision of "e-government" services to residents and businesses across the country (including rural areas).

The factors conditioning the need for the Project's implementation are as follows:

• development of the payment systems infrastructure, and its various components, in particular, the growth of the demand for providing free access to this infrastructure for the population of rural areas;
• insufficiency of the financial market, limited access to financial services and loans;
• insufficient number of bank branches in rural areas and small urban centres, and the fact that the vast majority of the population actually is not covered by banking services;
• current uncertainties in the collection of public utility charges.

 It is planned in connection with the Project's implementation to provide the general public with the following 3 types of services using the Azerpost platform:

1. Financial services-– electronic payments (pensions, social benefits, money transfers, etc.), collection of payments (charges for utility services, taxes), deposits (demand deposits and fixed-term deposits), other savings services, improvement of the existing money transfer system, debit cards issuance (based on the deposits of customers), etc.;

2. Electronic government services – issuing various certificates, business and personal documents by local and state authorities; payment of taxes, duties and other fees to local and state authorities;

3. Electronic business services – electronic commerce, opening cyber-mail and e-mail accounts, access to the internet network, data and electronic databases.