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Armenian Banks Defer Loan Repayments


Armenia -- Closed shops in an underground pass in Yerevan, March 27, 2020.

Armenian banks have agreed to suspend loan repayments for tens of thousands of individual borrowers and businesses hit hard by economic fallout from by the coronavirus pandemic, Prime Minister Nikol Pashinian announced on Friday.

“The volume of the restructured loans is around 200 billion drams ($404 million),” Pashinian wrote on Facebook. They were borrowed by around 97,000 individuals and nearly 3,400 local firms, he said.

The Armenian government last week imposed strict restrictions on people’s movement and ordered the closure of most firms to tackle the spread of coronavirus. The lockdown has left scores of Armenians facing a loss of jobs and income.

The government has faced opposition calls for imposing a blanket freeze on all loan repayments. Pashinian rejected those calls when he spoke in the parliament on Wednesday. He said the banks should deal with defaulting clients on a case-by-case basis.

Pashinian also said on Wednesday that Armenia’s public utility companies have agreed not to cut off electricity, natural gas and water supplies to people failing to pay their bills because of the economic shutdown.

The national gas distribution network, Gazprom-Armenia, confirmed on Friday that it will stop collecting gas fees for February at least until the state of emergency in the country ends on April 14.

In a statement, Gazprom-Armenia put the total amount of unpaid gas bills at 4.8 billion drams. It stressed that only about 7 percent of the sum is owed by low-income families receiving poverty benefits.

In a related development, Pashinian’s government approved on Thursday a multimillion-dollar stimulus package designed to cushion the broader impact of coronavirus. It includes one-off cash payments to citizens who have lost their jobs this month as well as financial assistance or credit subsidies to businesses and farmers. Pashinian said many banks will also benefit from the relief.

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