Structure Of CBA Trough The Fund EFSE To Allocate 2 Million Euro For Crediting Small And Medium-Sized Businesses

06.12.2011 18:57
Structure Of CBA Trough The Fund EFSE To Allocate 2 Million Euro For Crediting Small And Medium-Sized Businesses

YEREVAN, December 6. /ARKA/. European fund of South-Europe (EFSE) and affiliate structure of Central Bank of Armenia “Support to crediting of small and medium-sized businesses (SMBs)” (company) signed yesterday a credit agreement in the amount of 2 million euro, press-service of CBA informed ARKA News Agency.

“Due to the given investment, CBA supports crediting of SMBs in Armenia”, states the press-release.

According to the signed agreement, the affiliate of CBA invests funds in AMD in the financial “window” established by the Fund for the support and promotion of crediting small and medium-sized businesses in national currency.

“Crediting in national currency is considered the most effective means in reducing foreign risks. In particular, small and medium-sized enterprises will have opportunity to attract long-term credits in national currency avoiding foreign currency risks”, states the press-release.

It is also an effective mechanism for attracting additional funds, particularly Federal Ministry of Economic Cooperation and Development of Germany has envisaged investments in the amount of 5 million euro for the promotion of crediting in national currency in Armenia and other target countries of the Fund.

“The doors of the newly established financial “window” is open for new international donor organizations and local financial companies”, states the press-release.

“The fact that CBA is making significant efforts, inspires us a confidence towards the Fund and further positive impact for the development of the country’s economy”, said Chairman of Board of Directors of European Fund Klaus Glaubitt.

Head of Investment Committee Monica Beck said that though SMBs are the “backbone” of the Armenian economy, nevertheless they can not get corresponding profit from currency operations and finance its long-term currency liabilities.

“Thus, CBA serves a good example by making investments in the financial “window” of the Fund in national currency. Assisting in the expansion of the types of credit instruments, particularly long-term credits in national currency, CBA promotes the development of SMBs and, at the same time stability and development of the banking system”, she said.

Chairman of CBA Artur Javadyan highly appreciated cooperation with the Fund in the sphere of crediting SMBs.

“For stable development of banking system it is very important to have another financing source of crediting SMBs in national currency. Investments of the affiliate structure of CBA in the capital of the Fund give opportunity financial institutions of the country to attract additional financial means from international sources”, he said.

Javadyan said that two Armenian commercial banks – Conversebank and Araratbank have already attracted funds from the Fund for financing of SMBs and expect that due to the newly established financial “window” the number of cooperating financial institutions will increase.

European fund of South-Europe (EFSE) was established in December 2005 and is targeted at the promotion of economic development and prosperity of South-European countries. Among the shareholder-founders of EFSE are European Union, Government of Germany, Switzerland and Austria, as well as International Financial Corporation (IFC), European Bank of Reconstruction and Development (EBRD), German bank KfW and Dutch Fund FMO.

“Support to crediting of small and medium-sized businesses” cjsc was established on December 28, 2010 through cooperation with international specialized financial institutions with the purpose of supporting small and medium-sized businesses in Armenia. In particular, the main goal of the company is to conduct negotiations with different international financial organizations specialized in the sphere of crediting of small and medium-sized businesses with the purpose of provision of financial flows to the Armenian crediting institutions. The only owner of the company is the Central Bank of Armenia.--0-


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