Germany to lend Armenia 3.5 mln euros for deposit guarantees

Interfax
May 27 2004

Yerevan. (Interfax) – Germany will lend Armenia 3.5 million euros to
bolster its credit guarantee fund, Karapet Gevorkian, a representative
of Germany’s KfW, which will disburse the money, told Interfax.

KfW will release the money after it has approved a feasibility study,
due to be completed at the end of June, Gevorkian said. In addition,
the bank is still waiting for Armenia’s parliament to pass a law on
guaranteeing personal bank deposits, he said.

Armenia started its deposit guarantee fund on July 1, 2003, but this
will not be in a position to start payments until July 1, 2005.

It is thought the guarantee fund will receive the credit, which will
be repayable in 40 years, at 0.75% annually. The credit will enable
banks to lower mandatory deductions to the fund from 0.5% to 0.2%
of the deposits they receive.

Germany has issued 110 million euros in credits and grants to Armenia
to date.

From: Emil Lazarian | Ararat NewsPress