WB PROGRAM ON ACCESS TO FINANCE FOR SMALL-TO-MEDIUM BUSINESSES LAUNCHED
Noyan Tapan
Apr 2, 2009
Yerevan, April 2, Noyan Tapan: The WB program of access to finance for
small-to-medium businesses of Armenia was launched on March 31. This
is the first time Armenia receives credits from the WB not through
the channels of International Development Bank (intended for the
least developed countries), but through the International Financial
Corporation.
The credit worth 50 million USD is provided for 26.5 years and with 5
years of grace period on a guarantee of the ministry of finance. The
credit agreement between the Central Bank of RA and the WB has already
been ratified by the National Assembly of Armenia.
Presenting the program to journalists and all interested parties,
Michael Edwards, WB coordinator of the financial and private sector
programs for Europe and Central Asia mentioned, that the program was
developed in very short period of time, 3 month, which reflects the
effective work of both Armenia’s and WB’s teams.
The program should be implemented by the German-Armenian Fund Program
Implementation Office. According to Gevorg Tumanian, president of
the Fund, Armenia’s banks will initially provide loans to SME (their
annual turnover should not extend 500 million AMD), subsequently the
Fund can re-finance the banks, if provided loans meet WB standards:
Interest rates of the Fund are calculated as arithmetic mean (with
a slight margin) of CB’s refinancing interest rate (now 7.75 per
cent) and rates of government five-year bonds (currently around
7.2 per cent). Loans can be provided either in AMD or in foreign
currency. The Central Bank has selected on a competitive basis eight
banks in Armenia, which have obtained the right to become partners
of this program.
According to Vache Gabrielian, member of the Board of CB, loans of
the WB are not aimed at influencing interest rates of any country and
banks are free to provide loans with interest rates applied in the
country at the moment, taking into account existing risks. He told,
according to CB’s recent estimations, inflation pressure would be
consistent within coming months, so refinancing interest rate can be
reduced only after surpassing the pressure.
Currently, interest rates of the Armenia’s banks surpass 15 per
cent annually.
From: Emil Lazarian | Ararat NewsPress
