Azerbaijan will change how banks assess borrowers’ income and guarantors’ financial capacity for consumer loans starting Nov. 9, a move that could narrow access for some customers but does not prohibit lending.
The changes were approved by the Central Bank’s board in Decision No. 39/3 dated Sept. 15, 2026. The regulator said the rules are intended to improve assessments of customers’ ability to repay and strengthen credit-risk management.
Guarantor Debt Burden Capped at 70%
When a consumer loan is secured by a personal guarantee, the guarantor’s debt-service-to-income ratio must not exceed 70% under the new requirements.
The ceiling applies specifically to guarantors for consumer loans. It is not a universal new limit for every borrower or every type of loan.
Banking expert Ismail Mammadov said in a television comment that having an official job alone would not automatically qualify someone to act as a guarantor because existing financial obligations must also be considered.
In the example presented in the report, 70% of monthly income of 1,000 manats, or about $588, is 700 manats, or about $412. Payments on the guarantor’s own loans are included when the burden is calculated.
Verified Income Takes Priority
If a borrower’s income can be established through official documents or state information systems, a bank will not be allowed to replace those figures with income predicted by a behavioral model.
Such models estimate a customer’s financial capacity using information about behavior and transactions. The new rule limits their use when verified data are available.
Economist Rashad Hasanov told Baku TV, in comments cited by İqtisadiyyat.az, that the changes would reduce the pool of potential guarantors and limit behavioral lending.
The effect on individual banks will depend on the structure of their portfolios, with lenders holding a larger share of consumer loans likely to feel a greater impact. Stricter risk assessment does not automatically mean interest rates will decline.
Source: Vesti Baku.