Armenian banks seem to display interest in agriculture

Armenian banks seem to display interest in agriculture

Armenian Ministry of Agriculture is facing a challenge. Time will show whether it will succeed.

Agriculture seemed to be forgotten over the past years in Armenia and only in 2010, when unfavorable weather conditions resulted in a significant slump, the authorities came to senses and addressed the pressing problems.

PanARMENIAN.Net - The chairman of the Union of Banks of Armenia assures that the volumes of lending in the agriculture sector in 2010 increased by 19% compared to 2009. However, commercial banks in the republic refrained to finance agriculture projects because of high risks. Only 6 out of 21 commercial banks were providing agriculture loans last year.

Now, the situation tends to improve. The banks are thinking over the leasing and factoring services at lower interest rates. A governmental program aimed to back agriculture loans will help development of the field.

According to the government's decision, loans will be issued with 14% annual interest rate, 4% of which will be backed by the state. AMD 200 million has been allocated for the purpose.

The loans are provided at the amount of up to AMD 3 million with 6 months grace period.

Nevertheless, the opposition dislikes the governmental initiative, saying that not favorable lending terms but change of approaches can help rescue the agriculture.

Meanwhile, displeasure of new Agriculture Minister Sergo Karapetyan seems justified, as commercial banks are not a hurry to complete talks, although some of them have already started issuing agriculture loans.

Besides, relevant organizations have been established in cooperation with the World Bank. About 300 specialists will provide farmers with consultations in case of necessity.

Armenian Ministry of Agriculture is facing a challenge. Time will show whether it will succeed.

Victoria Araratyan / PanARMENIAN News
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