Harold Doan and Associates (press release), CA
June 7 2005

EBRD lends $1m to microbusiness in Armenia

Press Release – European Bank For Reconstruction And Development

The European Bank for Reconstruction and Development is lending $1
million to Armenia’s InecoBank to help it provide finance for local
entrepreneurs planning to develop small businesses.

Mike Davey, the EBRD’s country director for the Caucasus, Moldova and
Belarus, said: `The EBRD is delighted to be able to provide this loan
to InecoBank. The loan will help Armenian entrepreneurs get
much-needed access to finance to grow their businesses, and also
contribute to the strengthening of the Armenian financial sector.’

Fast-growing InecoBank, founded in 1992 to provide financial services
to micro- and small enterprises (MSE), is the fourth bank in Armenia
to benefit from a loan from the EBRD under the $10 million Armenia
Multi-Bank Framework Facility. This loan replicates previous
successful small business initiatives, now operating in 19 of the
Bank’s 27 countries of operation from Central Europe to Central Asia.

InecoBank will provide micro loans of up to $10,000 (or the
equivalent in Armenian dram) with a maturity of up to two years and
small loans of up to $60,000 (or the equivalent in Armenian dram)
with a maturity of up to three years.

Avetis Baloyan, chairman of InecoBank, said: `InecoBank is committed
to servicing the dynamic MSE sector in Armenia, and we look forward
to providing finance to this niche market with the help of the EBRD.
The EBRD loan will increase InecoBank’s funding for MSE lending and
trigger further growth in the loan portfolio as well as increase
access to finance for micro and small entrepreneurs’. Michael
Weinstein, recently appointed head of the EBRD’s Resident Office in
Yerevan, said that micro and small businesses were a very important
driver of economic development in Armenia and welcomed InecoBank’s
contribution as a provider of finance to MSEs.

InecoBank is one of the most profitable banks in Armenia. ShoreCap
International, a US-based investor with a focus on SME finance,
recently took a 15 per cent stake in the bank. InecoBank also has
access to EBRD’s Trade Facilitation Programme, which enables the bank
to service its existing client base and attract new clients by
offering guarantees without cash backing.