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Head of Agrarian-Peasant Union of Armenia blames banking system for
ruining villagers
by Gayane Isahakyan
Friday, May 30, 17:30
The banking system of Armenia has led the Armenian villagers to ruin,
Head of the Agrarian-Peasant Union of Armenia Hrachya Berberyan said
at a press conference in Yerevan.
"By my calculations, over the period of independence, Armenia has
received from international structures almost 50 mln USD loans for
various agrarian purposes", said Berberyan. He has no idea of how and
how effectively those funds have been used. "The loans were provided
to the banks at a low interest rate. For instance, the World Bank
provided the Government of Armenia with loans at LIBOR 0.5-0.75%, and
the latter provided the loans to the banks at 7% p.a. The banks, in
turn, lent the money to the villagers at 24%- 30% p.a.", he said.
"As a result, the villagers owe big funds to the banks now. I think a
special commission must immediately be set up to find out whether the
banks properly used the credit facilities meant for agriculture or
not", said Berberyan. He recalled that the Credit Yerevan Bank, for
instance, borrowed money from the World Bank for development of the
agrarian sector and God knows how it spent the money. Another example
of Berberyan concerned the state program subsidizing the agriculture
loan rates. "The Government provides preferential loans to the farm
entities, but in Shirak region only 40 farmers have received loans.
Today farmers badly need loans, but the banks fail to satisfy the
villagers' needs and agree to lend them at high rates - no lower than
18-20%. Cheap loans are extremely limited today", he said.
He also added that besides suffering of the credits, rural people have
also suffered of frost and hail. "Incidentally, the losses of the
agriculture facilities because of hail grow parallel to the growth of
the anti-hail stations at the territory of the country. The
agriculture sector needs immediate radical reforms. First, not
functionaries should create agriculture cooperatives but the farmers
themselves. Secondly, state functionaries have to draw out the law "On
producers of agriculture production". The next, it is necessary to
fully upgrade the irrigation system. Moreover, the anti-hail services
should become more responsible for the losses of the agriculture
facilities because of hail. We also need the net anti-hail system
similar to the one functioning in the European countries. And finally,
the rates of the banking agro credits should be decreased and the
terms of their repayment increased up to 15 years", - Berberyan said.
http://www.arminfo.am/index.cfm?objectid=53EDFFB0-E7FF-11E3-88B60EB7C0D21663
ruining villagers
by Gayane Isahakyan
Friday, May 30, 17:30
The banking system of Armenia has led the Armenian villagers to ruin,
Head of the Agrarian-Peasant Union of Armenia Hrachya Berberyan said
at a press conference in Yerevan.
"By my calculations, over the period of independence, Armenia has
received from international structures almost 50 mln USD loans for
various agrarian purposes", said Berberyan. He has no idea of how and
how effectively those funds have been used. "The loans were provided
to the banks at a low interest rate. For instance, the World Bank
provided the Government of Armenia with loans at LIBOR 0.5-0.75%, and
the latter provided the loans to the banks at 7% p.a. The banks, in
turn, lent the money to the villagers at 24%- 30% p.a.", he said.
"As a result, the villagers owe big funds to the banks now. I think a
special commission must immediately be set up to find out whether the
banks properly used the credit facilities meant for agriculture or
not", said Berberyan. He recalled that the Credit Yerevan Bank, for
instance, borrowed money from the World Bank for development of the
agrarian sector and God knows how it spent the money. Another example
of Berberyan concerned the state program subsidizing the agriculture
loan rates. "The Government provides preferential loans to the farm
entities, but in Shirak region only 40 farmers have received loans.
Today farmers badly need loans, but the banks fail to satisfy the
villagers' needs and agree to lend them at high rates - no lower than
18-20%. Cheap loans are extremely limited today", he said.
He also added that besides suffering of the credits, rural people have
also suffered of frost and hail. "Incidentally, the losses of the
agriculture facilities because of hail grow parallel to the growth of
the anti-hail stations at the territory of the country. The
agriculture sector needs immediate radical reforms. First, not
functionaries should create agriculture cooperatives but the farmers
themselves. Secondly, state functionaries have to draw out the law "On
producers of agriculture production". The next, it is necessary to
fully upgrade the irrigation system. Moreover, the anti-hail services
should become more responsible for the losses of the agriculture
facilities because of hail. We also need the net anti-hail system
similar to the one functioning in the European countries. And finally,
the rates of the banking agro credits should be decreased and the
terms of their repayment increased up to 15 years", - Berberyan said.
http://www.arminfo.am/index.cfm?objectid=53EDFFB0-E7FF-11E3-88B60EB7C0D21663