Global Insight
December 31, 2007


EBRD Pledges Funding for Armenia's Araratbank

by: Dragana IgnjatoviÄ


The European Bank for Reconstruction and Development (EBRD) announced
on Friday (28 December) the extension of a $5US-million credit line
and a $1US-million limit to Araratbank, a privatively owned Armenian
bank set up in 1991. The loan, which comes under the EBRD's Trade
Facilitation Programme and the Armenian Multi-Bank Framework II, will
be complemented by a technical co-operation grant for institution
building.

Significance:The EBRD loan is intended for lending to small and
medium-sized enterprises (SMEs), which should address one of the
major constraints on Armenia's economic growth, whose potential
remains constrained by problems in accessing medium- and long-term
finance. The loan should also bring about more competition among
local banks and more choice for local customers. The goal of the EBRD
in granting funding to the Araratbank and many other Amernian
banks--such as Anelik Bank, which received a $2US.5-million
SME-designated loan in 2006--is to help the Armenian banking sector
develop its long-term lending activities, especially in the country's
underdeveloped regions.
From: Baghdasarian