ArmSwissbank, EBRD sign $5mln loan agreement for SME financing

 October 2, 2014 - 16:34 AMT

PanARMENIAN.Net - ArmSwissbank and the European Bank for Reconstruction and Development (EBRD) signed an agreement for a $5 million loan (provided in local currency) for financing small and medium enterprises (SME).

The document was signed by Gevorg Machanyan, CEO-Chairman of the Board of ArmSwissbank CJSC and Mike Taylor, Director, Central Asia, Caucasus & Mongolia, Financial Institutions Team at EBRD.

The bank will on-lend the funds to SME at the annual interest of up to 14% and maturity period of up to 5 years. The maximal amount of the loan will be AMD 300 million. The SME employing up to 250 people can receive financing under the agreement.

Machanyan said ArmSwissbank and EBRD started cooperation in 2010, when the first $5 million loan agreement was signed for financing SME. The same year, EBRD extended a credit line to the amount of $3 million for ArmSwissbank as part of the Trade Facilitation Programme (TFP). The sum has tripled over the years of cooperation, reaching $9 million. As part of TFP, EBRD grant ArmSwissbank a status of a confirming bank.

Until the end of the year, ArmSwissbank and the EBRD will sign another $5 million loan agreement aimed at financing power-saving projects.

"The Bank highly appreciates cooperation with the EBRD, which implies financing on favorable terms, exchange of experience and staff training," Machanyan said.

Taylor, in turn, stressed the importance of providing loans in national currency to help de-dollarize the country's economy and make credit funds more accessible for SME.