YEREVAN, January 15. /ARKA/. Armenian Araratbank and the European Bank for Reconstruction and Development (EBRD) signed a $4 million worth credit agreement to co-finance large businesses, Araratbank executive director Ashot Osipyan told journalists today.

He said the on-lending will be available to large Armenian companies for a term of 7 years, up from the current 5 year term. The minimum amount of a credit will be $400,000 with interest rates varying between 11-14%, depending on risk level and the borrower’s capacity to service the credit.

Osipyan said the bank faced problems in providing large-scale funding to some of its big clients.

“Implementation of this program will allow us not only to solve funding problems. It will become an important element of our work since we are acquiring a technology for providing syndicated services,’ he said. According to him, Ararat bank and EBRD will be sharing risks fity-fifty.

He said on-lending will not be available for alcoholic drink and armaments producing companies. The focus will be on light industry, energy, construction and food companies.

Head of EBRD Yerevan Office Valeriu Razlog said the credit line will allow Araratbank not only to attract additional resources, but to also get technical assistance to assess long-term risks.

This is the fifth joint program to be implemented by Araratbank and EBRD in the last two years. The EBRD and Araratbank have been partners since November 2007, when the Armenian bank received a $5 million credit-line for lending to micro, small and medium-sized enterprises (MSME) and a $1 million credit-line for trade financing. EBRD holds 25% in Araratbank.

The rest is held by Barsegh Beglarian, head of the biggest petrol importing company Flash.

Araratbank, previously called Haykap Bank, was founded in 1991 and provides a full range of banking services to corporate, MSME and retail customers.

The bank has established a reputation as a small but reliable and dynamically growing financial institution.

The EBRD is the largest single investor in Armenia. To date the EBRD has committed over €335 million across more than 70 projects in various sectors of the Armenian economy. -0-