Azerbaijan has introduced new rules allowing certain short-term “daily” loans issued by non-bank credit organizations to be restructured once for up to 45 days after the borrower pays 20% of the remaining principal.
The amendments took effect on October 10, 2026. They apply to a defined category of short-term consumer loans and not to every bank loan or every agreement with a daily payment schedule.
How the 20% Rule Works
A borrower seeking revised repayment terms must first pay one-fifth of the outstanding principal. The calculation is based on the remaining principal, not the original loan amount plus every accrued charge.
For example, if the outstanding principal is 400 manats ($235), the borrower must pay 80 manats. The remaining 320 manats may then be placed on a new repayment schedule of up to 45 days.
The restructuring may be used only once. Overdue interest and penalties may not be charged during the restructuring, according to the amended rules governing credit-risk management at non-bank credit organizations.
The principal and ordinary contractual interest do not disappear. Borrowers should request a written calculation showing the outstanding principal, the required 20% payment, accrued interest and the total due under the new schedule.
Rules Apply Only to Defined Daily Loans
Under the regulation, a daily loan must be issued in Azerbaijani manats, may not exceed 500 manats, can carry a daily interest rate of no more than 0.3%, and must have an original repayment term of no more than 45 days.
Such loans cannot be secured by movable or immovable property. The regulation also caps the payments and charges covered by the rule, including after restructuring, at an amount equal to 100% of the principal.
No Automatic Debt Cancellation
The change does not erase late payments from a borrower’s credit history, cancel the debt or guarantee approval for another loan.
A separate assessment criterion previously treated arrears of more than 90 days on obligations representing at least 20% of the total as an indication of financial difficulty. Daily loans are now excluded from that specific criterion, but lenders may still assess repayment capacity and credit risk.
Borrowers who cannot keep up with payments should ask their non-bank lender whether their contract meets the legal definition of a daily loan and whether the one-time restructuring is available. An extra 45 days can ease repayment pressure only if the revised installments remain affordable.
Sources: Vesti Baku; Central Bank response reported by Metbuat.az