WB TO EXTEND $50MLN WORTH LOAN FOR DEVELOPMENT OF SMALL AND MEDIUM BUSINESS

ARKA
Feb 27, 2009

YEREVAN, February 27. /ARKA/. The Central Bank of Armenia and the
World Bank signed a loan agreement on provision of $50mln to the
country for development of small and medium business, the CBA Press
Service reported.

The document is signed by CBA Chairman Artur Javadyan and Director
of WB Yerevan Office Aristomene Varoudakis.

The aim of the program is to promote development of small and
medium entrepreneurship in Armenia through better access to mid-tern
loans. Under the program, favorable conditions will be created for
private small and medium enterprises and for the banks involved in
the program, says the report.

Loan funds are provided under terms of International Bank for
Reconstruction and Development to be repaid within 26.5 years and with
a 5-year grace period against security of Armenian Ministry of Finance.

The loan funds will be distributed through partner financial
organizations with who the Central Bank is to sign loan
agreements. Selection of these organizations will be competitive as
per the criteria set by the World Bank.

Taking into account that incomes and expenditures of the majority of
private small and medium enterprises operating in the territory of
Armenia are in Armenian Drams, most part of the loan is expected to
be provided in the national currency.

Yet, the program also gives an opportunity for credits in dollars,
if borrowers make an appropriate request and prove their foreign
currency income source, the press service said.

Private enterprises registered in Armenia and with their turnover not
exceeding 500mln Drams can apply for credits under the program. The
program will be implemented thorough the program management office
of German-Armenian Fund established in 2001.