EBRD and Armswissbanksign $8 million agreement for on-lending to SME

27.01.2010 21:44
EBRD and Armswissbanksign $8 million agreement for on-lending to SME

YEREVAN, January 27, /ARKA/. The European Bank for Reconstruction and Development (EBRD) said in a press release it is increasing the availability of financing to private businesses in Armenia with a $5 million credit line and a $3 million trade finance facility to ArmSwissBank for small and medium companies (SMEs).

Established in 2004, ArmSwissBank is a dynamically growing financial institution, operating as a private, corporate and investment bank, with a strong emphasis on brokerage services and liquidity management for Armenia’s financial sector.

The EBRD financing will diversify ArmSwissBank’s funding base and support its strategy to develop its SME lending activities. The proceeds of the EBRD credit line will be on-lent to small and medium entrepreneurs in Armenia.

In addition the EBRD is extending a $3 million trade finance facility to ArmSwissBank under its Trade Facilitation Programme (TFP), which will allow ArmSwissBank to enhance the support provided to local import-export oriented companies by guaranteeing their international trade finance and factoring obligations and providing pre-export and post-export financing, as well as financing of working capital needed to conclude foreign trade contracts, and other facilities.

“The EBRD is pleased to support the further development of ArmSwissBank, an important player in the Armenian banking sector, which is contributing to the diversification of the country’s financial infrastructure. This transaction will help increase the availability of much-needed financing for small and medium private companies in Armenia and will offer a boost to the development of capital markets in the country”, said Valeriu Razlog, Head of EBRD Office in Armenia after the signing ceremony.

The EBRD loan is part of the Bank’s Armenia Multi-Bank Framework Facility II, aimed at supporting the increase of financial intermediation in Armenia through medium-term credit lines to local commercial banks for on-lending to commercial customers. Since the facility was launched in 2006, over $110 million was disbursed to 11 banks operating in Armenia.

The EBRD’s Trade Facilitation Program involves over 120 issuing banks in 20 of the EBRD’s countries of operation, including 7 in Armenia, as well as around 720 confirming banks around the world. To date the Bank has financed over 290 trade finance transactions with total amount of more than $25 million under the TFP in Armenia.

Overall, since the beginning of its operations in Armenia, the EBRD has committed over ˆ335 million in approximately 70 projects in the financial, corporate, infrastructure and energy sectors.  -0-

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