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Armenia Gets $65 Million Loan From Asian Development Bank

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  • Armenia Gets $65 Million Loan From Asian Development Bank

    ARMENIA GETS $65 MILLION LOAN FROM ASIAN DEVELOPMENT BANK

    Tendersinfo News
    November 28, 2011 Monday 6:30 AM EST

    According to the Asian Development Bank s (ADB) released statement,
    it has agreed to provide $65 million loan for a period of five years
    to help Armenia enlarge its small and medium-scale enterprise (SME)
    segment, which is crucial for driving inclusive growth, increasing
    employment, and reducing poverty.

    The will be allocated to four Armenian banks which are ACBA Credit
    Agricole Bank, Ardshininvestbank, Ameriabank, and Inecobank. These
    four banks have robust monetary power and are dedicated to extend
    their lending services to SMEs.

    These Armenian banks will receive this amount to facilitate finances
    to the small- and medium-scale enterprises (SMEs) which constitute
    about 98% of all businesses and the country s gross domestic product
    s as well as employment opportunity s healthy above 40% is contributed
    by this sector.

    This is the first ADB initiative to promote SMEs in Armenia, and its
    largest initiative to-date in support of Armenia s financial sector.

    The program will provide the four banks with vital medium-term funds
    needed to reach more SMEs, said the Resident Representative in Armenia
    David Dole. Helping smaller firms to grow will create jobs and boost
    incomes as well as help Armenia diversify its economy.

    Though bank loan is presented to the Armenian SME sector but is far
    from fulfilling the requirements. The financial support to smaller
    businesses has been capped from the brake in payments following the
    2009 economic heartbreak and the banks unprecedented unwillingness
    to loan the smaller entities. Simultaneously, banks also experience
    problems in tracing medium-period finance to offer long-period loans
    to SMEs that required resources for investment to enhance output,
    said ADB.

    The ADB will also help the banks advance their capacity building
    for serving the SMEs in a far-sighted and nonstop way by offering
    expertise.

    The loan program includes many inventive qualities, like offering
    at least a certain amount of loans for businesses outside Yerevan,
    to bring equal development along with ensuring gender equality.

    >From over a decade, the Armenian government has been putting efforts
    to enlarge the SME segment and is currently running a SME national
    scheme which will form the path for its future growth. The government
    is keen to construct a robust SME segment, as well as will promote
    private sector moves such as ADB s program by offering banks with
    higher lending options for the SME division.

    The Manila-based ADB Was set up in 1966 and it is devoted to eradicate
    poverty in Asia and the Pacific via comprehensive economic as well as
    eco-friendly continuous development, plus regional amalgamation. It is
    possessed by 67 members, while 48 is from the region itself. In 2010,
    ADB grants, together with, co-financing, stood at $17.51 billion.

    Moreover, ADB s currently undergone Trade Finance Program has backed
    trade worth $2.8 billion.

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