Commercial banks increasingly favor SMEs' crediting: study

October 15, 2013 - 17:28 AMT

PanARMENIAN.Net - At present, 80 000 small and medium-sized enterprises (SMEs) are operating in Armenia, providing a GDP share of 40%. In 2013, the government of Armenia allocated AMD 150 million to develop the sector.

Ameria consulting company conducted a research on Armenia’s small and medium-sized enterprises (SMEs). The study includes the country’s macroeconomic description, SMEs’ characteristics, relations with banking systems, review of necessity of consulting and other professional services, regulation of the sector as well as comparative analysis with other countries.

The study showed that the positive attitude of the enterprise owners will promote the development of the sectors, despite slow growth in micro businesses, Senior Research Specialist at Ameria CJSC Artashes Shaboyan told during the research presentation.

As he noted, representatives of SMEs have though modest but positive expectations for the next 1-3 years.

According to the study, Armenia’s commercial banks favor the SMEs’ crediting, with 70% of credits provided in local currency (dram). The average credit amount is AMD 8,5 million at an annual rate of 18,5%. The rest of the credits were extended in U.S. dollars with the average credit amount of $130 thous. at an annual rate of 14,5%.

Also, though realizing the necessity of consulting services, Armenian SMEs chose not to use them in the absence of spare funds. According to the study, only 31% of SMEs used professional services in the last 2 years.

Armenian SMEs are mostly reluctant to implement innovations, with only 6% of them having announced about introducing innovations in manufacturing of new products.

The study covers 1003 SMEs, with 655 operating in Yerevan, 144 – in Gyumri, 152 – in Vanadzor, 52 – in Dilijan. 74,4% companies operate micro businesses, 20,2% - small businesses, 5,1% - medium businesses. According to the study, 47,6% SMEs are engaged in trade, 34,4% in services sector, 15,5% - manufacturing, 2,2% - construction, with trade prevailing among micro businesses – 55,2%.