17 MILLION DRAM CREDIT TO BE PROVIDED TO SMALL AND MEDIUM ENTREPRENEURSHIP OF ARMENIA

Noyan Tapan

Nov 21, 2008

YEREVAN, NOVEMBER 21, NOYAN TAPAN. At the November 20 sitting, the
Armenian government approved the project for financing the credit
program on development of small and medium enterprises.

The RA minister of finance Tigran Davtian said that the project can
be viewed in the context of measures for reduction of the possible
impacts of the global economic crisis. By the project, additional
money of 17 bln drams (about 55 mln USD) will be allocated to the
German-Armenian Fund that will provide sums to banks which in their
turn will finance small and medium enterprises.

The prime minister Tigran Sargsyan considered the draft as an important
measure to overcome the global financial crisis. According to him,
the provision of credits will create an opportunity for thousands of
small and medium enterprises to receive loans and create jobs, and
the expansion of SME’s opportunities is one of the best anticrisis
measures.

T. Sargsyan announced that that SMEs in the marzes (provinces) where
mining companies are located will also be financed under the project,
which will reduce the negative effects of the global economic crisis.

He said that the World Bank envisages providing a 250 million dollar
credit in addition to the 50 million dollar one. Negotiations on this
credit are now being conducted with WB. The prime minister expressed
a hope that the first tranche of the indicated credit will be received
in the first quarter of 2009.

Unlike CIS countries, according to the prime minister, Armenia has
a relative advantage: it is the country’s banking system that has
withstood the crisis and also shows quite good indices, operating at
a profit of over 20 billion drams.

It was mentioned that the German-Armenian Fund was established based
on an intergovernmental agreement between Armenia and German. It has
about 10 thousand borrowers and a 100% index of credit repayment.

During the sitting of the Armenian government, the chairman of the
Central bank of Armenia Arthur Javadian presented the draft law on
All-Armenian bank. He said that it is planned to create an All-Armenian
bank in early 2009.