YEREVAN, October 21, /ARKA/. The European Bank for Reconstruction and Development (EBRD) said it is extending US$ 17 million in two facilities to Inecobank, a long standing partner bank in Armenia, to further support the development of the country’s private sector.

The EBRD is increasing the availability of financing to private businesses in Armenia with a US$ 6 million loan for financing medium-sized companies through a funded participation in Inecobank loans under the Medium Sized Co-financing Facility. Another US$ 11 million loan is provided for on-lending to small and medium companies (SMEs).

Established in 1996, Inecobank is a dynamically developing bank with a focus on MSME sector and a strong market position in consumer lending. It is the 11^th bank in Armenia by total assets and is among the top 3 by efficiency indicators - ‘Return on equity’ and ‘Return on assets’.

The EBRD has been providing financial support and technical assistance to Inecobank since 2005 through its Trade Facilitation Programme and loans for on-lending to micro, small and medium enterprises (MSMEs) in the total amount of US$ 12 million. The new financing will enable Inecobank to keep up its development momentum, and expand its client base through lending to larger clients with EBRD participation and know-how with the help of TA consultancy. A new SME loan will provide additional financing to existing Inecobank SME clients and to new clients.

“The EBRD is delighted to continue to support a long-standing EBRD partner bank with this co-financing facility to Inecobank, which has achieved solid growth since 2007. The EBRD will help to close a financing gap in the market and create funding opportunities to the best-qualified growing private companies in Armenia, which constitute a dynamic segment of the private sector and play a crucial role in the country’s economic development”, said Valeriu Razlog, Head of EBRD Office in Armenia.

“SME financing is a strategic business line for Inecobank. Over 10 years, more than half of the lending investments of the Bank are concentrated in this sector, and the new funds extended by EBRD will also be directed to the financing of SMEs. Inecobank tends to further develop its activities in SME sector by positioning itself as a friendly and convenient bank ensuring high-quality and affordable banking services. Inecobank has been effectively cooperating with EBRD since 2005 and within the trade finance sector was recognized by EBRD as the best trade finance bank in Armenia. We enhanced our market penetration within these years and through this cooperation could help our customers to tap into new markets and develop their business. For the purpose of reaching our joint objectives, we make our best efforts” said Avetis Baloyan, the Chief Executive Officer of Inecobank.

The EBRD participation loan is part of the Bank’s Medium Sized Co-financing Facility 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, EBRD provided over US$ 41.7 million to 7 banks operating in Armenia.

SME loan is part of the 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 US$ 150 million was disbursed to 12 banks operating in Armenia.

Since the beginning of its operations in Armenia in 1992, the EBRD has invested over €420 million in 82 projects in the country’s financial, corporate and energy sectors, and infrastructure, with 96 per cent of the projects’ being investments into the development of the private sector.

Inecobank CJSC was established in 1996. The total assets of the Bank by the end of September 2010 comprised US$ 147.8 mln, while the capital comprised US$ 32.3 mln. Among the shareholders of the Bank are International Finance Corporation and DEG, a member of KfW banking group, with 10% and 13.5% shares accordingly. -0-