Baku: The value-added creation capacity of micro, small, and medium-sized enterprises (MSMEs) in Azerbaijan is relatively low, stated Rustam Tahirov, Director of the Sustainable Development of the Financial Sector Department at the Central Bank of Azerbaijan. His remarks came during the ‘Asia SME Monitor 2025’ seminar held in Baku, as reported by APA-Economics.

According to Azeri-Press News Agency, Tahirov highlighted that the SME sector, despite providing about half of the total employment in Azerbaijan, struggles with low productivity indicators. This issue is attributed to the concentration of employment in sectors that are primarily involved in low value-added activities.

Tahirov further explained that Azerbaijan’s financial system is heavily reliant on the banking sector, which plays a crucial role in channeling credit to the real economy. MSME loans currently constitute 20 percent of the total loan portfolio of banks and 47 percent of total business loans in the country.

The Central Bank official pointed out that although this trend reflects banks’ increasing contribution to economic activities, it also indicates potential challenges for SMEs in accessing collateral and liquidity during credit cycles. He stressed the importance of enhancing banks’ capacity to evaluate and manage SME risks. Additionally, diversifying financial sources beyond the banking sector, such as exploring capital markets and non-bank institutions, remains a key policy direction for the Central Bank.