IN AUGUST COMMERCIAL BANKS OF ARMENIA WILL BE ABLE TO ALLOCATE 650
CREDITS UNDER SMALL AND MIDDLE-SIZED BUSINESS MICROCREDITING PROGRAM

YEREVAN, AUGUST 9. ARMINFO. German-Armenian Fund forecasts that in
August of the current year commercial banks of Armenia will be able to
issue 650 credits worth a total of 3.0 mln euro. Senior Banking
Advisor to GAF and the German “Internationale Projekt Consult GmbH”
(IPC) firm Garik Khachatrian told ARMINFO. According to him, during
its activities in Armenia, the GAF has allocated 13,000 credits worth
a total of 80.8 mln euro, out of which 4,500 credits worth a total of
20.4 mln were placed in Jan-July of the current year. 507 credits
worth a total of 3.3 mln euro were issued to borrowers in July of this
year.

By Aug 1, 2004 GAF’s current credit portfolio had included 6,000
credits worth a total of 24.1 mln euro. Credits are distributed as
follows: trade 52.4%, production 26.2%, service sector 12.2%,
agriculture 9% and construction – 0.2%. As regards the number of
credits allocated to individual sectors, the situation is as follows:
trade sector 45.8%, the agriculture 31.7%, industrial sector – 13%,
service sector – 9.4% and construction – 0.1%.

One borrower can receive up to 33 mln drams for a period of up to
three years. Credits are repaid by monthly instalments. The annual
interest rates are 24% and 19% for the trade and production sectors
respectively. However, if a borrower has a good credit history and
applies for re-crediting, the annual interest rates can be reduced to
19% and 15% respectively. At the end of 2003 GAF has given the
partner-banks an opportunity for providing the borrowers with
microcredits by express-credits. At the end of 2003 GAF gave an
opportunity to partner-banks for giving microcredits to borrowers by
express-credits.

The GAF was founded by the Armenian and German Government in 1998
under an agreement on financial cooperation in supporting small and
middle-sized businesses in Armenia. The GAF launched the program in
September 1999. Among the GAF’s partners in the program are the
“Anelik Bank,” Armeconombank, ACBA, “Converse Bank” and
INECOBANK. Also, the GAF has its divisions in Lori region (town of
Vanadzor), Kotayk region (town of Abovian), Ararat (Artashat), Armavir
(Echmiadzin), Aragatsotn (Ashtarak), Vayots Dzor
(Yeghegnadzor). Credits are also allocated in Tavush and Shirak
regions.

According to the data of GAF, 144 credits worth a total of 1.4 mln
euro were allocated in Sept-Dec, 1999 under the program, in 2000 – 868
credits worth 4.1 mln euro, in 2001 – 1,238 credits worth 8.4 mln euro
and in 2002 – 2,470 credits worth 20 mln euro and 3,796 credits worth
a total of 26.4 mln euro were issued in 2003.

From: Emil Lazarian | Ararat NewsPress