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World Markets Research Centre
Global Insight
March 25 2010
Top Armenian Bank to Extend US$10-mil. OFID Loan to Small Businesses
BYLINE: Lilit Gevorgyan
One of Armenia's top banks, Ardshininvestbank and the Organisation of
Petroleum Exporting Countries (OPEC) Fund for International
Development (OFID) signed a US$19-million loan agreement yesterday at
the OFID headquarters in the Austrian capital Vienna. The loan is
extended for seven years to support Armenia small and medium
enterprises (SMEs). According to Nerses Karamanukyan, the Chairman of
the Management Board of Ardshininvestbank, the loan will provide a
much needed credit line for SMEs. He further stated that his bank is
planning to specialise more in this area and will try to expand its
co-operation with international financial institutions to attract more
loans. Suleiman Jasir Al-Herbish, General Manager of OFID, joined his
Armenian counterpart in highlighting the fund's interest to co-operate
with Ardshininvestbank and thus help the SMEs sector. OFID was set up
in 1976 to provide assistance to the non -OPEC countries.
Significance:The OFID loan is set to bolster Ardshininvestbank's
position in Armenia. The bank has been successful in expanding its
branches to 55 in the country and has also opened an office in Paris.
The OFID's lending is certainly good news for Armenian SMEs, which
continue to suffer from one of the worst economic downturns that the
country has seen since its independence in 1991. Furthermore,
businesses are constrained by operational obstacles such as the
blockade imposed by two of its four neighbours, Azerbaijan and Turkey.
Rising taxes as well as widespread corruption impose further
difficulties. The Armenian banking system is relatively new and
lending to SMEs was not well practiced even when the Armenian economy
was seeing double-digit GDP growth. With the global economic crisis,
banks are even warier of lending. Against this background
Ardshininvestbank's assurances that it will extend the loan to SMEs is
welcome news, although it will take some time to see if the bank
delivers on its pledges.
Global Insight
March 25 2010
Top Armenian Bank to Extend US$10-mil. OFID Loan to Small Businesses
BYLINE: Lilit Gevorgyan
One of Armenia's top banks, Ardshininvestbank and the Organisation of
Petroleum Exporting Countries (OPEC) Fund for International
Development (OFID) signed a US$19-million loan agreement yesterday at
the OFID headquarters in the Austrian capital Vienna. The loan is
extended for seven years to support Armenia small and medium
enterprises (SMEs). According to Nerses Karamanukyan, the Chairman of
the Management Board of Ardshininvestbank, the loan will provide a
much needed credit line for SMEs. He further stated that his bank is
planning to specialise more in this area and will try to expand its
co-operation with international financial institutions to attract more
loans. Suleiman Jasir Al-Herbish, General Manager of OFID, joined his
Armenian counterpart in highlighting the fund's interest to co-operate
with Ardshininvestbank and thus help the SMEs sector. OFID was set up
in 1976 to provide assistance to the non -OPEC countries.
Significance:The OFID loan is set to bolster Ardshininvestbank's
position in Armenia. The bank has been successful in expanding its
branches to 55 in the country and has also opened an office in Paris.
The OFID's lending is certainly good news for Armenian SMEs, which
continue to suffer from one of the worst economic downturns that the
country has seen since its independence in 1991. Furthermore,
businesses are constrained by operational obstacles such as the
blockade imposed by two of its four neighbours, Azerbaijan and Turkey.
Rising taxes as well as widespread corruption impose further
difficulties. The Armenian banking system is relatively new and
lending to SMEs was not well practiced even when the Armenian economy
was seeing double-digit GDP growth. With the global economic crisis,
banks are even warier of lending. Against this background
Ardshininvestbank's assurances that it will extend the loan to SMEs is
welcome news, although it will take some time to see if the bank
delivers on its pledges.