EDB to Provide $20 Million to Small and Medium Businesses in Armenia

A respective loan agreement was signed by the EDB and Armbiznesbank of Armenia.

Yerevan, 27 April 2010. Today, Gennady Zhuzhlev, Acting Director of the EDB’s Projects, and Ara Kirakosyan, Chairman of the Executive Board of Armbiznesbank of Armenia, signed an agreement on a $20 million, five-year loan facility for financing small and medium size businesses in Armenia.

This project is being implemented as part of the EDB’s policy to support small and medium size businesses by providing targeted loans to commercial banks from its member states, and is its first such project in Armenia.

The main objectives of this project are to:

• create favorable conditions for sustainable development of small and medium size businesses in Armenia,
• enhance the competitiveness of small and medium size businesses on external and internal markets thus supporting integration of the EDB member states;
• develop the infrastructure and institutional framework of a market economy;
• provide financial support for small and medium size businesses;
• create, expand, modernize and diversify the production assets of small and medium size businesses;
• enhance mutual trade between the EDB member states;
• create new jobs;
• increase tax revenue in the EDB member states; and
• saturate the markets of the EDB member states with affordable, high-quality products and services.

Small and medium size businesses are strategically important for Armenia, and are the mainstay of the country’s economic and political stability. Their share in national GDP traditionally account for about 40%. Bearing in mind the difficulties with long-term financing persisting in Armenia, the EDB’s loan facility will grant Armenian companies access to resources necessary for capital investments.

Just as importantly, the EDB believes that the loan will enable Armbiznesbank to improve its image as an investor, attract external partners and obtain international credit ratings.

Summary

Armbiznesbank, one of Armenia’s major banks, was founded in 1991. Now it demonstrates good financial standing and positive development dynamics, and possesses high-quality assets. As of 31 March 2010, the bank’s assets totalled 115.8 billion drams ($290 million), liabilities 99 billion drams ($247 million), equity capital 16.7 billion drams ($42 million), and charter capital 13.45 billion drams ($33.5 million).

Armbiznesbank provides loans to the real sector of the Armenian economy and small and medium size businesses. The bank has 22 branches and serves 30,000 individuals and about 2 companies.