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Banks Will Allocate 3 mln Euros to SME microccredit programs

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  • Banks Will Allocate 3 mln Euros to SME microccredit programs

    IN AUGUST COMMERCIAL BANKS OF ARMENIA WILL BE ABLE TO ALLOCATE 650
    CREDITS UNDER SMALL AND MIDDLE-SIZED BUSINESS MICROCREDITING PROGRAM


    YEREVAN, AUGUST 9. ARMINFO. German-Armenian Fund forecasts that in
    August of the current year commercial banks of Armenia will be able to
    issue 650 credits worth a total of 3.0 mln euro. Senior Banking
    Advisor to GAF and the German "Internationale Projekt Consult GmbH"
    (IPC) firm Garik Khachatrian told ARMINFO. According to him, during
    its activities in Armenia, the GAF has allocated 13,000 credits worth
    a total of 80.8 mln euro, out of which 4,500 credits worth a total of
    20.4 mln were placed in Jan-July of the current year. 507 credits
    worth a total of 3.3 mln euro were issued to borrowers in July of this
    year.

    By Aug 1, 2004 GAF's current credit portfolio had included 6,000
    credits worth a total of 24.1 mln euro. Credits are distributed as
    follows: trade 52.4%, production 26.2%, service sector 12.2%,
    agriculture 9% and construction - 0.2%. As regards the number of
    credits allocated to individual sectors, the situation is as follows:
    trade sector 45.8%, the agriculture 31.7%, industrial sector - 13%,
    service sector - 9.4% and construction - 0.1%.

    One borrower can receive up to 33 mln drams for a period of up to
    three years. Credits are repaid by monthly instalments. The annual
    interest rates are 24% and 19% for the trade and production sectors
    respectively. However, if a borrower has a good credit history and
    applies for re-crediting, the annual interest rates can be reduced to
    19% and 15% respectively. At the end of 2003 GAF has given the
    partner-banks an opportunity for providing the borrowers with
    microcredits by express-credits. At the end of 2003 GAF gave an
    opportunity to partner-banks for giving microcredits to borrowers by
    express-credits.

    The GAF was founded by the Armenian and German Government in 1998
    under an agreement on financial cooperation in supporting small and
    middle-sized businesses in Armenia. The GAF launched the program in
    September 1999. Among the GAF's partners in the program are the
    "Anelik Bank," Armeconombank, ACBA, "Converse Bank" and
    INECOBANK. Also, the GAF has its divisions in Lori region (town of
    Vanadzor), Kotayk region (town of Abovian), Ararat (Artashat), Armavir
    (Echmiadzin), Aragatsotn (Ashtarak), Vayots Dzor
    (Yeghegnadzor). Credits are also allocated in Tavush and Shirak
    regions.

    According to the data of GAF, 144 credits worth a total of 1.4 mln
    euro were allocated in Sept-Dec, 1999 under the program, in 2000 - 868
    credits worth 4.1 mln euro, in 2001 - 1,238 credits worth 8.4 mln euro
    and in 2002 - 2,470 credits worth 20 mln euro and 3,796 credits worth
    a total of 26.4 mln euro were issued in 2003.

    From: Emil Lazarian | Ararat NewsPress
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