YEREVAN, January 23./ARKA/. Rates of interest on loans extended to farms should be reduced from 14% to 5%, head of “Farmers’ Movement” NGO Sarkis Sedrakyan told a press conference Wednesday.

Under a government decree of April 1, 2011, Armenian farmers can get soft loans on an annual interest rate of 14%, 4% of which is subsidized by the government. Loans are extended in Armenian drams, the average loan amount is 625,000 drams.

“It is very difficult for farmers to pay the 10% specified by the government every year, especially in the first two years, as it takes about five years to get income from the cultivated land. Hence, farmers are forced to take out new loans and get into debts,” Sedrakyan said.

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The Union of Banks of Armenia and the German-Armenian Fund (GAF) announced the second phase of a loan program designed for agriculture.

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VTB Bank (Armenia) doesn’t rule out probability of retail segment’s appearance in agriculture market, said Valery Ovsyannikov, director general of VTB Bank (Armenia).

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Tags: agro, retail, VTB Bank (Armenia)

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