DIRECTOR OF "RURAL FINANCING FACILITY" PROGRAM IMPLEMENTATION OFFICE: THANKS TO IMPLEMENTATION OF WORLD BANK AND IFAD PROGRAMS, CREDITING OF ARMENIA’S AGRICULTURE HAS BECOME ATTRACTIVE FOR BANKS
Noyan Tapan
Nov 6, 2007
YEREVAN, NOVEMBER 6, NOYAN TAPAN. The implementation of the World
Bank’s and the International Fund for Agricultural Development (IFAD)
credit programs on development of Armenia’s agriculture has contributed
to the fact that crediting of agriculture has become attractive for
Armenian commercial banks, the head of the Rural Financing Facility
programs implementation office – state institution of the RA ministry
of finance and economy Ara Muradian expressed this opinion during a
talk with NT correspondent.
He reminded that crediting under the IFAD’s program started in late
2005, while crediting under the WB’s program – in late 2006. According
to him, prior to that, only ACBA Bank used to provide large credits
to agricultural enterprises in Armenian marzes, whereas other banks
considered agriculture as a risky sector. In his words, it is also
thanks to efforts of the Rural Financing Facility that the situation
has notably changed now. According to data of the Central Bank of
Armenia (CBA), the total amount of credit resources provided to
agriculture by Armenian commercial banks from their own resources in
2006 exceeded by about 11 billion drams (more than 3.3 million USD)
the respective index of the previous year. Besides, the indicated
banks opened about 30 branches in marzes in 2005-2006, with their
main activities being crediting of agriculture and the adjacent
sectors. "By promoting the crediting of water canals, agricultural
enterprises, other infrastructures, we have made agricultural
investment attractive. This is the only way of solving the problems
related to the proportional development of our country. I am sure
that 2007’s results will show that agricultural crediting has grown,"
A. Muradian pointed out.
He said that the mechanism of providing group credits has been tested
through the Rural Financing Facility during the credit programs’
implementation when larger than needed credits were provided to
two milk processing enterprises for the purchase of a high-capacity
conveyer – on condition that by the quarantee of these enterprises,
credits will be provided to 40-50 milk supplying farms (not having
credit security) with the aim of increasing the number of milk-giving
animals. "Thanks to this mechanism, a whole border village, which
had never received loans before, has become a beneficiary of the
Rural Financing Facility program implementation office," A. Muradian
said. He added that such mechanisms allowing a whole village to become
a beneficiary of the rural crediting system have been used in foreign
countries, including post-Soviet ones (Moldova), for a long time. In
Armenia, the rural cooperation movement had just started developing.
From: Baghdasarian