An Armenian law-enforcement agency reported on Friday an almost 20 percent increase in property and other assets confiscated by it across the country last year in accordance with court rulings.
Mihran Poghosian, head of the Service for the Mandatory Execution of Judicial Acts (SMEJA), put their total monetary value at over 15 billion drams ($37 million). He said most of those assets were homes belonging to Armenians who failed to repay loans extended by commercial banks.
Many of those people are low-income farmers defaulting on their credit payments. They used their village houses and land as collateral to borrow from banks.
Agricultural lending has expanded significantly in Armenia since the late 1990s. Tens of thousands of farmers are struggling to repay such loans.
Poghosian singled out Arazap, a village near the Armenian-Turkish border. Most of its 330 or so households risk losing ownership of their homes after failing to repay loans borrowed from the ACBA Credit Agricole bank several years ago. According to Samvel Harutiunian, the village mayor, the main cause of their debts is a powerful hailstorm that destroyed their crops in 2009.
“This is a quite sad indicator and we are now working with the bank to see how the residents’ debts can be restructured and solve the problem in that way,” Poghosian told reporters, referring to the situation in Arazap.
Hakob Andreasian, ACBA’s deputy chief executive, insisted that the bank is ready to reschedule debt repayments and has actually seized few village houses to date. “We are not interested in accepting village homes as collaterals,” he told RFE/RL’s Armenian service (Azatutyun.am). “We are more interested in land, which is easier to sell.”
The SMEJA last year called for serious restrictions on the use of homes as collateral by banks and other financial institutions. It pointed to an increased number of Armenians facing the loss of their sole properties.
Poghosian on Friday linked the increased asset seizures with the economic situation in the country. “I would be a very strange person if I said that the socioeconomic plight of people has improved,” he said. “Let us acknowledge this fact.”