International rating agency "Fitch Ratings" has affirmed the long-term issuer default rating (IDR) of the Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan (MCGF) at "BBB-" for both foreign and local currency.
According to the Operative Information Center-OMM, citing "Fitch," the outlook for the ratings remains "Stable."
The agency noted that the credit status of the MCGF is aligned with Azerbaijan's sovereign rating, which also holds a "BBB-" rating with a stable outlook. "Fitch" classifies the fund as a government-related entity (GRE) with strong ties to the state, playing a pivotal role in executing government policy to provide affordable housing to the population.
The financial stability of the MCGF is bolstered by consistent state support. During 2024–2025, the government injected a total of 172.7 million manats in capital to fund the organization's social mortgage programs. Furthermore, the Central Bank of Azerbaijan (CBA) facilitates a mechanism for repurchasing the fund's bonds, with the CBA currently holding approximately 80% of all securities issued by the MCGF. The fund also benefits from income tax exemptions, and its bonds carry a preferential risk classification, enhancing their appeal to the banking sector.
In the current year, the state allocated 100 million manats to the MCGF, primarily directed toward social mortgages and the subsidization of small and medium-sized enterprise (SME) loans. Notably, as of June 2026, the fund's entrepreneurship support functions were transferred to another state entity, allowing the MCGF to focus more exclusively on its housing mandate.
According to "Fitch," the MCGF remains a profitable state agency. By the end of 2025, the fund's net profit reached 26.8 million manats, up from 23.2 million manats in 2024, driven by the expansion of its credit portfolio. Asset quality is rated highly, with non-performing loans in the aggregate mortgage and leasing portfolio accounting for no more than 0.1%.
The fund maintains a dominant position in its segment, controlling approximately 80% of the mortgage lending market for households in Azerbaijan. As a non-commercial organization, its liquidation or reorganization can only be authorized by a decree from the President of Azerbaijan. Its operational activities are overseen by a Supervisory Board, which includes representatives from the Presidential Administration, various ministries, and the CBA.
The Mortgage and Credit Guarantee Fund serves as a cornerstone of Azerbaijan's social policy, specifically designed to improve living conditions for citizens through accessible long-term financing. By providing state-backed guarantees and low-interest mortgage loans, the fund plays a vital role in the country's broader economic development and social welfare strategy.
