First halal business financing through an international line in Azerbaijan

According to research, the very first problem of businesses is access to sources of finance. The formation and development of a business, and the sustainability of that development, depend first of all on financial opportunities. If we specify this problem a little further, businesses' wish to obtain finance in a halal way may well emerge as the biggest problem.

The Islamic Corporation for the Development of the Private Sector (ICD) of the Organisation of Islamic Cooperation has allocated several million dollars in funds in line with halal finance terms for Azerbaijan. ICD delivers these funds to entrepreneurs through the conventional interest-based banks existing in Azerbaijan. Thus, Azerbaijan's local banks carry out a murabaha transaction for local businesses in exchange for an agency fee paid by ICD. In other words, using ICD's money, the bank buys the goods a business needs and sells them to it on deferred terms. It should be noted that this product is more expensive compared with other conventional interest-based loan products. However, since businesses trying to operate in a halal way have no other halal financing options, they are forced to take this step.

Within this framework, on 19 December 2024, a local conventional interest-based bank in Azerbaijan signed the first loan agreement provided through the ICD line with Alizadeh LLC. This important step aims both to meet the halal financing needs of small and medium-sized businesses (SMEs) in Azerbaijan and to support the development of financial solutions in line with Islamic rules.

For detailed information on the topic, you can watch the report prepared by Ictimai TV.

We believe that this loan agreement will expand the Islamic Corporation's (ICD) financial services market in Azerbaijan.

It should be noted that Alizadeh LLC became the first company in Azerbaijan to implement this innovative halal financing solution. The company's director, Kazim Mustafazade, also said that the signed agreement will strengthen their trading activities and position. At the same time, he stressed that this opportunity is very important not only for us but also for the development of the country's economy.

We would also add that Alizadeh LLC , which is engaged in steel production in Azerbaijan, has been added to the Halal Ekosistem platform because it meets several halal requirements.