By Atom Markarian
The European Bank for Reconstruction and Development (EBRD) has allocated $1 million to an Armenian commercial bank to support local small businesses. Under an agreement signed between the EBRD and Armenia's INECO Bank on 7 June, the allocated funds will be issued to small businesses in Armenia in the form of micro (up to $10,000) and small (up to $60,000) loans for a period from two to three years.
INECO Bank Executive Director Yervand Barseghian said at a press conference following the signing of the agreement that the interest rates for the loans will be close to the rates on the market.
"We have no intention to issue loans at dumping rates," he said.
Loans available on the market today are issued at interest rates ranging
from 15 percent to 20 percent, differing from bank to bank.
EBRD Director for the South Caucasus, Belarus and Moldova Mike Davey said the EBRD sees the main direction of its work in Armenia in financing
small and medium-sized business projects.
"The EBRD's strategy is to work in a range of different sectors here in
Armenia," he added.
The EBRD implements similar credit projects with four private banks in
Armenia and also has a 25 percent stake in Hayeconombank's capital.
According to Davey, the EBRD is conducting negotiations with another
Armenian bank, ACBA, to acquire a certain share in the latter's capital.
(Photolur photo: Davey, left, and EBRD Yerevan Office Head Weinstein)