(MENAFN- Trend News Agency) BAKU, Azerbaijan, November 12. The Central Bank of Azerbaijan (CBA) plans to submit amendments to the legislation concerning Islamic banking to the government by the end of 2025, Director of the CBA Financial Sector Sustainable Development Department Rustam Tahirov said at the presentation of the Asian Development Bank's (ADB) Asian Small and Medium-Sized Enterprises (SME) Monitoring 2025 (ASM 2025) report in Baku, Trend reports.

According to him, government agencies and more than 15 state institutions have prepared a national strategy for financial inclusion.

"Although the document is still in the draft stage, it is expected to be approved soon," Tahirov said.

He noted that SME loans in Azerbaijan account for 25 percent of the total loan portfolio and 47 percent of the total business portfolio, demonstrating the growing engagement of banks with the real economy.

"However, this also suggests that during periods of change in the credit cycle, SMEs may face difficulties in securing financing for their operations," Tahirov explained.

According to the CBA representative, SMEs also play a significant role in providing employment, accounting for almost half of national employment.

He also pointed out that SME employment is focused on low-productivity sectors.

"It's important to improve banks' ability to effectively assess and account for SME risks, as well as to develop measures aimed at diversifying funding sources beyond banks, including bond and capital markets," added the official.

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