March 18, 2010 - 20:07 AMT PanARMENIAN.Net
- The EBRD is boosting the availability of local currency financing in Armenia with a synthetic loan in Armenian Drams (AMD) worth $4 million to FINCA UCO CJSC for on-lending to local micro and small enterprises (MSEs).
Wholly-owned by U.S. based FINCA International, FINCA UCO CJSC is the third largest non-bank credit organization in Armenia by its assets size, servicing MSEs, with a special focus on the smallest borrowers in rural areas.
The proceeds of the EBRD loan will enable FINCA UCO CJSC to meet the growing demand for local currency financing and increase its outreach to entrepreneurs in remote areas.
The synthetic local currency loan, the first one provided by the EBRD to a microfinance institution in Armenia, will help FINCA UCO CJSC increase the term of its local currency funding, and expand its portfolio of loans in AMD. This will enable FINCA UCO CJSC's clients to repay their loans in the same currency as they earn from their operations.
The EBRD loan is complemented by a technical assistance grant from the EBRD's Early Transition Countries Multi Donor Fund, which will be used to strengthen risk management practices at FINCA UCO CJSC and to help the institution develop new products.
"Through this transaction, the EBRD is boosting its support for the development of the private sector in Armenia which is dominated by micro and small enterprises. The local currency loan will enable FINCA UCO CJSC and its clients to reduce foreign exchange risks", said EBRD President, Thomas Mirow.
"FINCA UCO CJSC is very happy to count the EBRD as a strategic partner. I'm confident that we will continue to help the lowest income entrepreneurs in Armenia and, in turn, the development of the country," said FINCA UCO CJSC CEO, Yervand Barseghyan.
Overall, since the beginning of its operations in Armenia, the EBRD has committed over 393 million in 77 projects in the financial, corporate, infrastructure and energy sectors.