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BANKS ARE VICTIMIZING ARMENIA'S VILLAGERS; DOES ANYONE CARE?
Edik Baghdasaryan
http://hetq.am/en/economy/credit-3/
2010/05/03 | 15:22
Feature Stories economy
For the past few issues, we have been presenting our readers stories
of individuals who have taken out bank loans, mainly for agricultural
purposes, and the financial mess they have wound up in. We have
stressed that the loan system is such that rural residents are facing
a credit crisis and that many are forced to sell off their worldly
possessions to pay back these loans, granted as high interest rates
and in dollars.
Villagers are losing their homes, their land and, consequently, their
faith in the government. This loss of faith is the most damaging and
has forced many to seek their fortunes outside of Armenia.
Today, the Armenian courts are full of cases in which banks have taken
individuals to court seeking the seizure of property for non-payment
of loans. The destinies of real people are at stake here.
After travelling to various rural areas in Armenia, it has become
woefully evident that local residents who have taken out bank loans
now find themselves in a veritable financial spider's web which is
difficult to get out of. The only practical recourse is to sell off
what they can and then leave the country.
The banks and other lending institutions operate according to a
ruthless usury system in which the hapless villager is there to
be exploited. Government officials from the president on down, the
parliament and political parties, all seem to have more urgent issues
to attend to - Armenian-Turkish relations, Obama, Medvedev, Sarkozy,
Erdogan, et al. What chance does the average Armenian village have
when stacked up against such notables?
The country is constructing regional centers in all fields; financial,
health, education. We are busy concocting a plethora of pan-national,
intra-national and universal programs with such grandiose names as
"Come Home", etc. No one on high seems willing or so inclined to come
off their lofty perch and actually trod the length and breadth of
the country, through the rural communities of Armenia, the backbone
of the nation.
We've been trying to break down certain barriers for the past few
months. The RoA Central Banks argues that the loan system is legally
regulated and that it cannot do anything. But I say that the Bank also
writes and applies the law. If the legislature needs your input you
are at the ready to push through changes in the space of a few hours.
We have met with dozens of Armenian MP's, presented the reality on
the ground to them. Their reaction is to assume a serious tone and
grave face and reply - Yes, it's a very important issue that needs
to be addressed. And they raise the issue.
Various government officials are heard to say - How has it happened
that those credit agencies and the banks have escaped being monitored?
It's not possible. It's the responsibility of the Central Bank.
We have presented the facts. But what's the use? It's impossible to
crack the wall of indifference, of uncaring.
You would think, however, there would be just one person in this
country who could explain why villagers are hit with 30% interest
rates when the banks get the money at 24%. Is there anyone out there
able to justify why the banks should be allowed to reap super profits
by swindling Armenia's rural residents?
All these personal accounts of credit victims that Hetq has published
only go to show how the government has been "assisting" Armenia's
villagers and "developing" the country's agricultural sector. The
only result that we can see is that more people are being deprived of
their land and are forced to leave Armenia, many for good. Then again,
was this the plan all along?
From: Emil Lazarian | Ararat NewsPress
Edik Baghdasaryan
http://hetq.am/en/economy/credit-3/
2010/05/03 | 15:22
Feature Stories economy
For the past few issues, we have been presenting our readers stories
of individuals who have taken out bank loans, mainly for agricultural
purposes, and the financial mess they have wound up in. We have
stressed that the loan system is such that rural residents are facing
a credit crisis and that many are forced to sell off their worldly
possessions to pay back these loans, granted as high interest rates
and in dollars.
Villagers are losing their homes, their land and, consequently, their
faith in the government. This loss of faith is the most damaging and
has forced many to seek their fortunes outside of Armenia.
Today, the Armenian courts are full of cases in which banks have taken
individuals to court seeking the seizure of property for non-payment
of loans. The destinies of real people are at stake here.
After travelling to various rural areas in Armenia, it has become
woefully evident that local residents who have taken out bank loans
now find themselves in a veritable financial spider's web which is
difficult to get out of. The only practical recourse is to sell off
what they can and then leave the country.
The banks and other lending institutions operate according to a
ruthless usury system in which the hapless villager is there to
be exploited. Government officials from the president on down, the
parliament and political parties, all seem to have more urgent issues
to attend to - Armenian-Turkish relations, Obama, Medvedev, Sarkozy,
Erdogan, et al. What chance does the average Armenian village have
when stacked up against such notables?
The country is constructing regional centers in all fields; financial,
health, education. We are busy concocting a plethora of pan-national,
intra-national and universal programs with such grandiose names as
"Come Home", etc. No one on high seems willing or so inclined to come
off their lofty perch and actually trod the length and breadth of
the country, through the rural communities of Armenia, the backbone
of the nation.
We've been trying to break down certain barriers for the past few
months. The RoA Central Banks argues that the loan system is legally
regulated and that it cannot do anything. But I say that the Bank also
writes and applies the law. If the legislature needs your input you
are at the ready to push through changes in the space of a few hours.
We have met with dozens of Armenian MP's, presented the reality on
the ground to them. Their reaction is to assume a serious tone and
grave face and reply - Yes, it's a very important issue that needs
to be addressed. And they raise the issue.
Various government officials are heard to say - How has it happened
that those credit agencies and the banks have escaped being monitored?
It's not possible. It's the responsibility of the Central Bank.
We have presented the facts. But what's the use? It's impossible to
crack the wall of indifference, of uncaring.
You would think, however, there would be just one person in this
country who could explain why villagers are hit with 30% interest
rates when the banks get the money at 24%. Is there anyone out there
able to justify why the banks should be allowed to reap super profits
by swindling Armenia's rural residents?
All these personal accounts of credit victims that Hetq has published
only go to show how the government has been "assisting" Armenia's
villagers and "developing" the country's agricultural sector. The
only result that we can see is that more people are being deprived of
their land and are forced to leave Armenia, many for good. Then again,
was this the plan all along?
From: Emil Lazarian | Ararat NewsPress