A European Union lending institution pledged on Friday to provide 50 million euros ($55 million) in fresh low-interest loans to Armenia’s small and medium-sized enterprises (SMEs) mostly involved in agriculture, food processing and tourism.
The European Investment Bank (EIB) signed a corresponding agreement with the Central Bank of Armenia (CBA) in Yerevan. It said the CBA will make the EIB funds available to such firms through Armenian commercial banks and other credit organizations.
EIB Vice-President Jan Vapaavuori, who signed the agreement on behalf of the Luxembourg-based bank, said they will be lent “on favorable terms.”
“This will contribute to the diversification of the Armenian economy and private-sector development and will have a positive influence on job creation in the country,” an EIB statement quoted Vapaavuori as saying.
“I am confident that this loan will mimic the success story of its predecessor by its effectiveness and accuracy in targeting the access to finance for SMEs in Armenia,” CBA Governor Artur Javadian said for his part.
The EIB already provided Armenia with 50 million euros for the same purpose in 2014. “To date, more than 100 projects throughout the country have benefitted from them, in particular in the tourism and agri-food sectors,” read its statement.
According to the CBA, small and medium-sized agricultural, agribusiness and tourism companies will also be the main beneficiaries of the fresh EU funding. Those sectors “play an important role in developing Armenia’s economy,” explained the Central Bank.
Prime Minister Karen Karapetian welcomed the continuation of the EIB lending scheme when he met with Vapaavuori later in the day. Karapetian said the Armenian government plans to help set up investment funds that will support various domestic manufacturing sectors and hopes to “expand cooperation with the EIB in this direction.”