Thursday, March 24 2011 22:22
Armenian banking system needs state support to overcome credit risks in agrarian sector
ArmInfo. The growth in food prices and possible deficit impose on the banking sector the necessity to considerably increase the financing of the agrarian sector, Chairman of Board of Prometey Bank Emil Soghomonyan told ArmInfo correspondent.
According to him, regardless of the food commodities output, the demand for them will always be high, and this demonstrates a considerable potential in this sphere. "We realize that investments in the agrarian sphere contain certain risks, but the state's support is needed to overcome them", he said.
Soghomonyan offers several solutions to the problem. For instance, he thinks that one can create agricultural cooperatives possessing relevant agricultural equipment for the farmers. It is disadvantageous to rent that equipment because of its deficit and high prices of fuel. The banking loans in this sphere should be provided at low rates, which is possible in case of a state subsidizing mechanism. In addition, some benefits should be envisaged or delay in payments for the water used for irrigation, as well as for electric power used for glass-grown and other facilities.
The banker also suggests providing loans to the farmers on reasonable terms and without any risks for the lending bank. This will give an opportunity to the banks to credit the farmers at low interest rates. "If we, the bankers, are given certain state guarantees when providing loans to agriculture, we will considerably activate the work in this dimension", he stressed.
Active consumer lending causes double-digit growth in bad loans 
Luys Foundation: Armenian government continues to face challenges in budget planning
Armenia`s brandy and winemaking industry in crisis - economist 
Even at embryonic stage, powerful impetus given to economic activity in energy sector - ENA acting manager 
Armenian NA OKs ENA nationalization 
China preparing to open new chapter of One Belt, One Road initiative with involvement of Armenia - diplomat 
The Merger between "Ardshinbank" CJSC and "Ardshininvestbank" CJSC Has Been Completed
Ticket packets 1.2% of total number of transport tickets in Yerevan