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About 63,000 Farms In Armenia Provided With Preferential Agricultura

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  • About 63,000 Farms In Armenia Provided With Preferential Agricultura

    ABOUT 63,000 FARMS IN ARMENIA PROVIDED WITH PREFERENTIAL AGRICULTURAL LOANS

    Financial Services Monitor Worldwide
    October 29, 2014 Wednesday

    A total of 60 billion drams were provided to about 63,000 small
    farms in Armenia as preferential agricultural loans over the last
    three years, Central Bank of Armenia chairman Arthur Javadyan told
    a parliamentary hearing today on next year's budget.

    Under a 2011 government decision, Armenian farmers are eligible to
    preferential agricultural loans at 14% interest rate, of which 4%
    (6% in border villages) are subsidized by the state. The loans are
    provided in the national currency, the dram. The average loan size
    is 625,000 drams, the grace period is 6 months, after which only
    interest are repaid, and the principal sum is to be repaid in the
    following 6 months.

    Mr. Javadyan said about 10,000 preferential loans had been provided
    from April to July and as many in August alone this year. He said
    the program is quite successful adding also that the interest rate
    on agricultural loans will be lowered.

    Mr. Javadyan said there is another agricultural lending program
    implemented in cooperation with the German bank KfW in the amount of
    15 million euros and $5.5 million. According to him, before the end
    of the month another joint program with KfW is to be signed.

    Armenian government's draft budget for 2015 earmarks 1.2 billion drams
    for subsidizing agricultural loans. The government has revised the
    subsidy rate making it 6 percent for all rural communities irrespective
    of their location beginning from 2015.

    According to official data, in 2013 the government spent 634.5 million
    drams on subsidizing the interests of agricultural loans, up 9.8%
    from the previous year.

    In late August the total agricultural lending stood at 115.3 billion
    drams, having surged by 54 percent from beginning of the year. The
    national agricultural GDP in the first eight months of this year
    totaled 482.9 billion drams, a 4.9% rise when compared to the same
    period last year. 2014 Global Data Point.

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