Armenian Central Bank chairman explains why interest rates on loan may reach 50-100%

21.03.2019 17:58
Armenian Central Bank chairman explains why interest rates on loan may reach 50-100%

YEREVAN, March 21, /ARKA/. The chairman of the Central Bank of Armenia Artur Javadyan unveiled today some details of a set of projects designed to improve the financial literacy of citizens. Speaking at a recurrent government meeting he also touched on the issue of high interest rates demanded by banks on loans.

“We are carrying out numerous projects, designed to raise the financial literacy of citizens. Currently we are working with the Ministry of Education and Science to embrace as many schoolchildren as possible. We have also trained a large number of school teachers who can share the knowledge they acquired with their students,” he said.

Javadyan said also that a Personal Finance Month is being held, in addition to thematic events and round tables. The head of the Central Bank added then that seminars are held in the Central Bank apart from advertising of financial literacy through television and other channels of information.

The cabinet meeting looked also in the issue of consumer misleading by banks regarding the real effective interest rate on loans.

Prime Minister Nikol Pashinyan said in turn he had received many reports from citizens, who say that despite the government’s statements on lowering interest rates, there has been no real change, as banks compensate for losses by increasing the service fees.

"The loan contracts specify the final interest rate, regardless of how the organization builds its business. 24% is the maximum legally-allowed interest rate on loans, including the loan servicing fee, notary services, and so on," Javadyan said.

He said also that pawnshops and other financial organizations often impose very high interest rates which may reach 50%, 60%, 70% or even 80% -0-


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