Azerbaijan will change how banks assess borrowers’ income and guarantors’ financial capacity for consumer loans from Nov. 9. The rules may narrow access for some customers but do not ban consumer lending.
The Central Bank approved the changes in a Sept. 15, 2026, board decision, No. 39/3. The regulator said they are intended to strengthen assessments of customers’ ability to pay and improve credit-risk management.
Guarantor Debt Burden Capped at 70%
When a consumer loan is secured by a personal guarantee, the guarantor’s debt burden must not exceed 70% of income. Banks will use that ratio when assessing whether the guarantor can meet the obligation.
The limit applies specifically to guarantors for consumer loans. It should not be presented as a single new cap for every borrower or every type of credit.
Verified Income Takes Priority
If a borrower’s income can be established through official documents or government information systems, a bank may not replace that evidence with income predicted by a behavioral model.
Behavioral models use information about a customer’s activity and transactions to estimate financial capacity. The new rule restricts their use when verified income data are available.
Economist Rashad Hasanov, commenting to Baku TV in a report cited by İqtisadiyyat.az, said 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 loan portfolios, with lenders that have a larger share of consumer credit likely to feel the change more strongly. Tighter risk assessment does not automatically mean lower interest rates.
Source: Vesti Baku.