MFI CIA - Azerbaijan - 6% p.a. loan
Kamal. N Mikayilov lives in Arkivan village of Masalli region (250 km from Baku). Despite the factthat our potential borrower is a retired person (pension is 170 AZN), his main source of income is farming.This potentialborrowerused to beour client andhe repaid debts on time. Nowadays his farming contains 3 cows and 2 calves. He sells the remaining milk and makes a profit. Both cows give about 7 litres of milk. The cost of 1 litre of milk is 0.5 AZN. Thus, only from the sale of milk he is obtaining approximately 102 AZN monthly (0.5*7)*29). Taking the above into consideration, we can say that monthly income is 272 AZN. If we put aside 200AZN for the family expenses, the remnant is 72 AZN. Thus, we believe that it is possible to provide a loanin the amount of 850 USD for the 18months applying 25percent interest rate ($500*1.7). Hence, Kamal N. Mikayilov can pay monthly 57.14 AZN ($ 33.61)easily. A question can arise, if he can get the income from thesale ofmilkduring300 days, how will he repay the loan in the rest period. The answer to this question is that the borrower has the land of 1In addition to all, the borrower’s debtwill be secured by two guarantors having monthly income of 124AZN and 160AZN respectively, with whom individual contracts will be signed. If monthly loan repayment is divided between the two guarantors, the amount for each of them will be 29AZN respectively.