EBRD to provide $7 million loan to Araratbank to enhance agriculture

19.07.2012 19:00
EBRD to provide $7 million loan to Araratbank to enhance agriculture

YEREVAN, July 19. /ARKA/. The European Bank for Reconstruction and Development (EBRD) and Araratbank signed today a $7 million loan agreement for enhancing Armenia’s small and medium enterprises (SMEs) and boosting the agricultural sector.

Head of EBRD Yerevan Office, Valeriu Razlog, said the loan will be provided in Armenia’s national currency, the dram, that will allow Araratbank to respond to its customers’ demands who seek long-term loans in the national currency.

"Part of that amount – an equivalent to $1 million, Araratbank will provide to small agricultural businesses, including farms, processing companies and all related enterprises", he said. The maximum amount of a loan is $300,000. Arartbank will on-lend part of the loan to companies dealing with construction, manufacturing, agribusiness, trade and services.

"We would also like to acknowledge the technical assistance provided to Araratbank by EU’s Neighborhood Investment Facility. Simultaneously with the issuance of the loan we will assist Araratbank in improving the skills for providing loans to agricultural sector," said Razlog.

"To date, the total amount of funds provided by EBRD to Araratbank is about $20 million," he said.
On his side, Araratbank board chairman, Ashot Osipyan, said under this agreement the Araratbank will receive the best technology for the lending to agriculture. He also emphasized the benefits of borrowing in the national currency.

"This will create favorable conditions for customers of Araratbank; we will try to free our customers from currency risks,» he explained.

According to Osipyan, loans will be provided at 14-15% interest rate, repayable in 3-5 years.
The EBRD is one of the largest investors in Armenia. It has been cooperating with Armenian government since 1992. As of March 2012 the EBRD has invested over 516 million euros in 106 financial, corporate, energy and infrastructure programs here. -0-

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