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By Shakeh Avoyan
The Central Bank of Armenia (CBA) unveiled on Wednesday its first-ever assessment of the creditworthiness of the country’s leading enterprises which is designed to facilitate commercial bank lending and discourage corporate tax evasion.

Its chairman, Tigran Sarkisian, said the Western-style credit ratings will be assigned to companies on a regular basis in order to make it easier for them to obtain big loans from local banks. He said businesses rated creditworthy by the CBA will also be well placed to issue and sell corporate bonds.

Armenian banks usually demand collaterals for extending loans to individuals or companies, something which makes large-scale lending highly difficult. That, coupled with high interest rates, is seen as a serious obstacle to faster economic growth.

Sarkisian argued that companies seeking a high credit rating will be disinterested in underreporting their earnings, an illegal practice which is practice in Armenia. “At the same time we want to create incentives for those enterprises to set good examples for other enterprises willing to operate in the legal and controlled environment and to be transparent to the public,” he said at the official presentation of the service.

The CBA ratings system is modeled on market risk analysis which is done in the West by renowned private companies such as Moody’s Investors Service. The bank will classify companies into four categories indicating the degree of their creditworthiness.

Its analysts have already examined financial statements of 30 large companies and assigned scores to only half of them. No company was included in the highest A category of rankings and only three of them -- two metallurgical plants and a manufacturer of construction materials -- made it to the B category. The owners of those firms are not among Armenia’s wealthiest businessmen connected to the government.

(Photolur photo: Tigran Sarkisian.)
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