AZE.US
Overdue loans in Azerbaijan continue to grow, reflecting rising interest rates, inflationary pressures and seasonal financial strain on households. Economists say the trend could signal broader risks for the credit market if it persists.
The volume of overdue loans in Azerbaijan has increased, prompting concerns among economists about growing financial pressure on borrowers.
According to the Central Bank of Azerbaijan, the total amount of overdue loans reached 557.5 million manats as of February 1. This represents a 6.3 percent increase compared with January 1, while the volume of problematic loans has grown by 17.35 percent over the past year.
Analysts say one of the key drivers behind the increase is the rise in lending interest rates.
Statistics released by the central bank show that the average interest rate on manat-denominated loans rose from 16.6 percent to 17.7 percent in 2025. Much of the increase has been driven by consumer lending.
As of January 1, 2026, average interest rates for several types of consumer loans in the national currency stood at:
-
Credit card loans: around 26%
-
Loans for household appliances: about 26%
-
Home renovation loans: about 18%
-
Car loans: roughly 13%
-
Other consumer loans: about 22%
Economist Akif Nasirli, chairman of the Liberal Economists Center, says the sharp rise in overdue loans at the beginning of the year can often be linked to several factors.
At the start of the year, banks finalize their financial reporting for the previous year, which often leads to more accurate recognition of delayed payments. As a result, some overdue debts are formally classified as problematic loans, creating a visible jump in the statistics.
Economic pressures on households and businesses are another contributing factor. Rising prices and inflation, combined with incomes that are not increasing at the same pace, make it harder for borrowers to meet their monthly loan payments.
Loans denominated in foreign currencies can become particularly burdensome when exchange rates fluctuate, increasing the real cost of repayment.
Economists also point to a seasonal pattern. Spending typically rises in December, while household budgets tighten in January, causing some borrowers to delay payments.
If the upward trend in overdue loans continues, experts warn it could signal slowing economic activity and growing credit risks within the banking sector.