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EBRD provides $3m finance to Armenian bank
July 25 2005
Press Release - European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development is providing a
$3 million financing to the Agricultural Cooperative Bank of Armenia
(ACBA). The loan is the first in Armenia of a new type of EBRD
instrument, the Medium-Sized Loan Co-Financing Facility (MCFF).
The MCFF is one of several instruments offered in Armenia,
Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Tajikistan and
Uzbekistan, the Bank's seven lowest-income countries of operation,
under the Early Transition Countries (ETC) initiative. This
initiative, launched by the EBRD in 2004, aims to stimulate market
activity by using a streamlined approach to financing more and
smaller projects, mobilising more investment, and encouraging
economic reform. The initiative is part of an international effort to
address poverty in these members of the Commonwealth of Independent
States (the former Soviet Union). The Bank will accept higher risk in
the projects it finances in the ETCs, while still respecting the
principles of sound banking.
The MCFF is available to banks with strong credit policies and
procedures, but which are limited in the loans they can provide to
local corporate clients. It allows ACBA to co-finance, with the EBRD,
bigger sub-loans to its clients and share with the EBRD any risks
involved with such lending. While ACBA's internal credit procedures
have until now limited any credit exposure per single borrower to a
maximum of $180,000, with the help of the MCFF it will be able to
offer its most trusted and financially viable clients from $400,000
to $1 million.
ACBA was created in 1996 to help farmers find finance after Armenia
privatised state-held land. It was modelled on France's Credit
Agricole. Its structure -- with collective ownership based on village
cooperative associations, and coffers swelled at the grassroots by
more than 20,000 farmers' sign-up fees of $10 - is unique in the
former Soviet space. ACBA has since developed business outside
agriculture in almost all areas of the economy. The EBRD is delighted
to make this co-financing available to ACBA, which is now Armenia's
largest bank by capitalisation, and generates solid profits, said
Michael Weinstein, head of the EBRD's Armenia Resident Office.
July 25 2005
Press Release - European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development is providing a
$3 million financing to the Agricultural Cooperative Bank of Armenia
(ACBA). The loan is the first in Armenia of a new type of EBRD
instrument, the Medium-Sized Loan Co-Financing Facility (MCFF).
The MCFF is one of several instruments offered in Armenia,
Azerbaijan, Georgia, the Kyrgyz Republic, Moldova, Tajikistan and
Uzbekistan, the Bank's seven lowest-income countries of operation,
under the Early Transition Countries (ETC) initiative. This
initiative, launched by the EBRD in 2004, aims to stimulate market
activity by using a streamlined approach to financing more and
smaller projects, mobilising more investment, and encouraging
economic reform. The initiative is part of an international effort to
address poverty in these members of the Commonwealth of Independent
States (the former Soviet Union). The Bank will accept higher risk in
the projects it finances in the ETCs, while still respecting the
principles of sound banking.
The MCFF is available to banks with strong credit policies and
procedures, but which are limited in the loans they can provide to
local corporate clients. It allows ACBA to co-finance, with the EBRD,
bigger sub-loans to its clients and share with the EBRD any risks
involved with such lending. While ACBA's internal credit procedures
have until now limited any credit exposure per single borrower to a
maximum of $180,000, with the help of the MCFF it will be able to
offer its most trusted and financially viable clients from $400,000
to $1 million.
ACBA was created in 1996 to help farmers find finance after Armenia
privatised state-held land. It was modelled on France's Credit
Agricole. Its structure -- with collective ownership based on village
cooperative associations, and coffers swelled at the grassroots by
more than 20,000 farmers' sign-up fees of $10 - is unique in the
former Soviet space. ACBA has since developed business outside
agriculture in almost all areas of the economy. The EBRD is delighted
to make this co-financing available to ACBA, which is now Armenia's
largest bank by capitalisation, and generates solid profits, said
Michael Weinstein, head of the EBRD's Armenia Resident Office.