EVALUATION OF THE ROLE OF BANKS' BUSINESS LOANS IN INVESTMENT ACTIVITY IN THE NON-OIL-AND-GAS SECTOR

Abstract

The presented research focuses on comprehensively assessing the role of lending, particularly business lending, which is a key direction of financial intermediation in the banking sector of the Republic of Azerbaijan, in ensuring investment activity in the non-oil and non-gas sectors of the national economy. The main objective of the study is to determine the impact of banks’ business loans on investment processes in the non-oil and non-gas segment of the economy and to measure this impact using various indicators. The study analyzes parameters such as the ratio of loan placements to GDP and non-oil GDP, the share of loans—especially business loans—in bank assets, bank loan interest rates, banks’ non-interest expenses, the share of business loans in banks’ credit portfolios, capital expenditures, and the distribution of working capital. Additionally, the research examines the function of business loans as a source of financing for investments in fixed capital, the share of industry and manufacturing in banks’ loan portfolios, as well as the relationship between banks’ consumer loans and imports. The analysis demonstrates the strategic significance of bank lending in increasing investment activity in the non-oil and non-gas sector and clearly illustrates the impact of credit policy on the real sector of the economy. These findings provide a scientific basis for the formation of banking sector development strategies and the diversification of the national economy, while also serving as a methodological foundation for future research.