EBRD CONTRIBUTES TO MSE DEVELOPMENT IN ARMENIA

Panorama.am
15:10 26/12/2008

The European Bank for Reconstruction and Development is extending
a $10 million loan in three trenches to enable VTB Bank Armenia to
offer credit to micro and small sized enterprises (MSEs) across the
country, reports the "VTB Armenia" bank.

The project will enable the creditworthy MSEs in Armenia have access
to medium-term reliable sources of finance. The program is under
Armenia Multi-Bank Framework Facility II. The loan will be accompanied
by technical assistance under the Armenia Microlending Program,
an institution-building Technical Cooperation Program designed to
facilitate the MSE lending activities of partner banks. Technical
cooperation funds have been provided by the EBRD’s Early Transition
Countries Multi-donor Fund and Shareholders’ Special Fund.

VTB Bank Armenia, ranking fourth by total assets, is an important
player in the Armenian banking sector; it has the largest branch
network in the country. With its 78 branches across the country and
new products and services for the lower income groups, VTB Bank Armenia
is expected to contribute to the development of Armenia’s MSE sector,
including in the rural areas.

"Micro and small enterprises are the backbone for a developing
economy. There is a significant unmet demand for MSE finance in the
country", said Chikako Kuno, Director of the EBRD’s Group for Small
Business. "This facility gains particular prominence in the current
environment of global liquidity constraints and with VTB Bank’s wide
regional presence we hope to increase financial access for the rural,
micro and small entrepreneurs in the country", added Ms. Kuno.

The EBRD is committed to the development of the MSE sector in its
countries of operation. Its Group for Small Business manages long-term
MSE financing programs in 15 countries and has acquired substantial
experience in building MSE lending operations. Promoting micro and
small companies is one of the Bank’s top priorities in Armenia and,
indeed, across the entire region in which it operates EBRD is the
largest single investor in Armenia having invested some EUR 202 million
in 52 projects in all major sectors of the economy. The country is
part of the Early Transition Countries Initiative, launched in April
2004, which uses a streamlined approach to financing to mobilize more
investment and encourage economic reform.

According to the source, the EBRD, owned by 61 countries and two
intergovernmental institutions, aims to foster the transition from
centrally planned to market economies in central and Eastern Europe
and central Asia.