By Atom Markarian
The Armenian government approved on Thursday an action plan for next year which it said will spur the growth and development of small and medium-sized private businesses. Under the annual program 250 million drams ($442,000) in budgetary funds will be spent on providing technical and financial assistance to new and existing firms across the country. The government also expects additional funding from Western donors.
About 100 million drams of the planned aid will take the form of loan guarantees to businesses that will borrow from Armenian banks to be selected on a competitive basis. A lack of cheap and accessible credit is a major problem cited by their owners.
The credit guarantees will still be a drop in the ocean, with government data putting the overall amount of bank loans made to small businesses this year at 15 billion drams.
According to Karen Chshmaritian, the minister of industry and economic development, a special state agency tasked with promoting small business has opened offices in three Armenian regions this year and will establish its presence in other parts of the country in the course of 2004. He said the agency will create, in particular, a “business incubator” in Armenia’s second city of Gyumri that will provide local start-ups with office space and counseling free of charge.
The government will also sponsor a new “technopark” in Yerevan to promote innovations among small and medium-sized firms, Chshmaritian added.
According to official economic forecasts, the small and medium-sized enterprises’ share in Armenia’s Gross Domestic Product will grow to 40 percent in 2003. It stood at 35 percent last year. At least half of the country’s workforce is now believed to be employed by the sector.