Loans and leasing obligations will be allowed to be transferred to another bank while retaining state subsidies, according to a draft decision presented at a government meeting by Economy Minister Gevorg Papoyan.

The proposed amendments are part of the “Productivity Promotion Program” and are aimed at modernizing the toolkit and improving its effectiveness.

Under the proposal, each beneficiary participating in the program would be allowed to transfer an existing loan or leasing obligation once from one financial institution to another for refinancing purposes, 1lurer.am reported.

In the event of such a transfer, the state subsidy would continue under the existing program conditions without extending the overall subsidy period.

“For example, a company may have taken a loan or lease from a bank at a conditional 12% interest rate, of which we subsidize 8 percentage points. But if another financial institution offers 10%, we will still compensate our 8 percentage points. The company will transfer the 12% loan to a 10% loan and pay 2% instead of 4%. This is an improvement that also increases competition,” Papoyan said.

The government also proposed subsidizing capital construction projects for hotel facilities in Armenia’s regions, including construction and reconstruction work carried out with value-added tax-paying contractors, provided that the investment project complies with the law and sector regulations, as well as state tourism development priorities.

“For this direction, the loan interest subsidy period is set at up to 36 months, while the subsidy amount is proposed at 8 percentage points for dram-denominated loans and 6 percentage points for foreign currency loans,” the minister said.

Another proposed subsidy direction concerns waste processing, disposal and material treatment. Under the proposal, subsidies would amount to 6% for dram-denominated loans and 8% for leasing, while foreign currency loans would receive 4% subsidies and foreign currency leasing agreements 6%.

Papoyan also said the government proposes ending subsidies for the acquisition of systems intended for electricity generation at newly contracted solar power plants.

“This proposal came from our partners at the Ministry of Territorial Administration and Infrastructure, and all obligations under existing contracts will continue to be fulfilled according to established procedures,” he said.

Deputy Prime Minister Mher Grigoryan, commenting on the transfer of loans between banks, stressed that the refinancing process should be monitored to ensure that transferred loans do not deviate from their intended purpose.