Armenia: EFSE and ARARATBANK Sign Loan Agreement to Support Micro and Small Ente...
Yerevan, Armenia, June, 07 2011 -
The European Fund for Southeast Europe (EFSE) signed a new 10 million US dollar loan agreement with ARARATBANK (or the “Bank”) in Armenia at the EFSE’s Annual Meeting held in Tirana, Albania, today. The loan will help the Bank to expand its micro and small enterprise (MSE) lending activities.
ARARATBANK is among the top-ten banks in Armenia in terms of assets with a market share of 4.2 per cent (as at 31 March 2011). The Bank provides a full range of banking services to micro, small and medium-sized enterprises, corporations and retail customers.
The EFSE’s loan will enable the Bank to provide its clients with sustainable long term financing, which is still scarce for local MSEs, thereby addressing a major obstacle to the country’s economic growth. Thanks to the Bank’s extensive branch network, the credit facility will particularly benefit MSEs outside Armenia’s capital, Yerevan, in areas where the supply of banking services is still limited.
The EFSE and ARARATBANK have been partners since June 2010, when the Bank received a USD 5 million credit line for on-lending to MSEs. The EFSE's first loan has already had a strong development impact by helping to create and sustain jobs as well as accelerating business growth among MSEs and increasing confidence in the banking sector in Armenia.
"The EFSE’s first loan to ARARATBANK has been implemented successfully, and we are pleased to support the Bank again"
, said Dr. Klaus Glaubitt, Chairman of the Board of Directors of the EFSE. “Through financially sustainable institutions such as ARARATBANK, the EFSE is supporting growth and development of Armenia’s MSEs, which are a key element for economic development in terms of their contribution to employment and economic growth.”
Mr Ashot Osipyan, Chairman of the Executive Board of ARARATBANK, appreciating the cooperation between European Fund for Southeast Europe (EFSE) and ARARATBANK OJSC, stated that the 10 million US dollar credit line is already the second project implemented in cooperation with EFSE. He added: “I am extremely gratified that the cooperation between ARARATBANK OJSC and our respected partner, the European Fund for Southeast Europe, which has significant experience in the region and in former Soviet Union countries, has proved such a success within such a short timeframe. Since October 2010, when the USD 5 million loan agreement was signed, we have on-lent funds to micro and small businesses for approximately 110 credit projects. The EFSE’s loan enabled us to provide our clients with increased credit availability and more competitive conditions, and to diversify our loan portfolio”.
Mr Ashot Osipyan emphasised that this new credit line of 10 million US dollars is expected to have a significant impact on the development of micro and small businesses in Armenia, affording an opportunity to prosper and implement new business projects for many existing and new loan customers. As one of Armenia’s leading banks in the area of micro and small business finance, ARARATBANK OJSC intends to, within the framework of its development mission, enlarge its loan volume and geographic reach. The Bank will also continue to strengthen its productive cooperation with the European Fund for Southeast Europe in the future.
ARARATBANK is among the most experienced banks in the area of SME and MSE lending in Armenia. ARARATBANK’s loan portfolio has experienced dynamic and sustainable growth since 2007 thanks to modern lending technologies and methods, its professional and highly qualified staff, and its wide-ranging branch network. In 2010, loan volume grew by 57%, and an increase of 15% has been reported for the first quarter of 2011.