INECOBANK increases its outreach to Micro and Small Entrepreneurs by joining the IFC Armenia Microfinance Program

During the Agreement signing ceremony Avetis Baloyan, the CEO of INECOBANK said, "With the onset of the financial crisis, microfinance proved to be one of the most sustainable products for the bank and as one of its strategic sector priorities. Via participation in the IFC's Microfinance Initiative we are planning to significantly increase our microfinance sector penetration and reach out the underserved markets, particularly in the rural parts of Armenia. The project was welcomed and supported by the Bank's shareholders including DEG which, together with CIM helped to bring on board of the Ineco's management team an expatriate Chief Strategy Officer, who helped the Bank to refine its strategy." Jointly with IFC, INECOBANK developed an action plan that outlines specific measures that need to be implemented to build up the Bank's capacity to provide micro loans, particularly in the rural parts of the country.

Georgina Baker, IFC Director for Global Financial Markets, said, "Microfinance has proven to be a critical tool in the fight against poverty. Our support to INECOBANK will enable the bank to offer a variety of microfinance products to the businesses and individuals that have not had access to these services before, thus promoting growth and sustainable development in the country."

Microfinance has demonstrated its potential to assist the micro-entrepreneurs to make significant strides towards reducing their vulnerability, improving their livelihoods, paying for basic health care and financing their children's education. INECOBANK identified microfinance as one of its priority tasks towards the fulfillment of its mission and since the end of 2007 has been consistently working towards the development of this initiative. The Bank demonstrated an ability to provide financial services to poor people on a sustainable, profitable basis and has built a good network of international partners in microfinance development sector.

To recall, IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis.

DEG, member of KfW Bankengruppe (KfW banking group), is one of the largest European development finance institutions. For more than 40 years, DEG has been financing and structuring the investments of private companies in developing and emerging market countries. DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy and focuses also on investments in the financial sector in order to facilitate reliable access to capital locally. So far, DEG has worked together with more than 1,500 companies and provided 4.7 billion euros of finance over the past five years alone.

Inecobank CJSC is a universal bank founded in 1996 with the vision of contributing to Armenia's economic development and the improvement of population of welfare. The bank is among the top 10 banks in Armenia with the total assets of USD 130.5 mln. and capital of USD 25.8 mln. as of the end of 2009. Among the shareholders of the Bank are IFC (10% shares) and DEG (13.5% shares). The bank partners with reputable international organizations such as EBRD, KfW banking group, OFID, ADB, BSTDB, WB, SNS Institutional Fund, responsAbility etc.