YEREVAN, February 7. /ARKA/. Candidate for Armenia’s president, former prime-minister Hrant Bagratyan plans to achieve one-and-a-half-time reduction in interest rates on agricultural loans if elected.

Under his election platform Bagratyan envisages complex solutions to rural lending problems as share of farm loans in the overall loan portfolio of banks is extremely small.

“Agricultural loans extended in 2011 totaled 74.6bln drams, which is 5.5% of the overall loan portfolio of Armenian banks. In 2010 it was 55bln (6.2%), despite the fact that the share of agriculture in GDP was 18.1% in 2010”, reads the platform.

In terms of share in overall credit portfolio, agriculture is currently the sixth one, after industry, construction, trade, consumer loans and mortgage, Bagratyan said.

“In 2013, according to Central Bank’s projections, overall amount of agricultural loans will grow to 95bln drams, but agriculture will be then the seventh in the list with its about 5% share in the total loan portfolio”, the candidate said.

The share of rural lending can be increased if, first of all, universal banking system is changed to a specialized one, according to Bagratyan.

Apart from this, the candidate suggests freezing interest rates on all loans extended before March 1, 2013, binding villagers to repay the main loan only, whereas debt interest will be paid off by the government.

Under government decree of April 1, 2011, soft loans are extended to Armenian farmers at an annual rate of 14%, of them 4% is subsidized by the government. Loans are extended in drams; average loan size is 625,000 drams. ($1=406.03drams). –0--