By Atom Markarian
A state-run German bank formalized on Tuesday release of 5.1 million Euros ($4.6 million) in additional funds for a lending scheme for small and medium-sized Armenian businesses.
An agreement signed by Finance and Economy Minister Vartan Khachatrian, Central Bank Chairman Tigran Sarkisian and a senior official from the KfW bank will bring to 12 million Euros the total amount of low-interest credit resources provided by the Germans since 1999.
More than 2,000 loans worth up to $50,000 each have been disbursed to local entrepreneurs to date, resulting, according to official figures, in 9,000 new jobs. The money has been handled by four Armenian commercial banks. All of the loans have been repaid on time.
Johan Masiozek, the KfW executive who signed the agreement, said the bank and the German government decided to provide fresh funds because they are satisfied with the first results of the program. Khachatrian also described it as “highly effective.”
Sarkisian said the program has proved to be more successful than other similar lending schemes because of more simple procedures and conditions for getting a loan. A small or medium-sized firm has its loan application approved or rejected within two weeks. Also, the four local banks disbursing KfW loans have more flexible collateral requirements.