Friday, April 29 2011 12:16
Armenian banks provide nearly 2 bln drams loans to local farmers
ArmInfo. As part of the Government program of assistance to Armenian farmers, the local banks have already placed nearly 2 bln drams, Chief Executive Office of ACBA-Credit Agricole Bank Stepan Gishyan said at the Central Bank on April 28.
The banker said that the 10% annual interest on loans is rather preferential for farmers. In addition, he said, the program safeguards villagers against foreign currency risks as loans are provided in terms of the national currency. S. Gishyan is sure that the preferential financing of farmers will promote the sector. As regards pledge security, S. Gishyan said that the bank accepts any real estate, including land lots, agricultural equipment, motor vehicles and others. The customers with good credit history are provided with loans on letter of comfort.
S. Gishyan said that the return on agro-loans is 99%, which testifies to honesty of rural residents. As regards the interests on loans, Gishyan said that over the last 15 years the interests showed downward trends, which will continue also in future. The banker said that local banks are not able to fund the population on lower interests as their attract dram deposit on rather high interests - 10%-12% and sometimes even 13%. In addition, the resources raised from international structure are not cheap either.
"Their cost for Armenia and for European countries differs," he said. S. Gyshyan said that international structures evaluate the risks in European countries lower than in Armenia. S. Gishyan expressed hope that the expected production growth in the sector will lead to certain reduction of prices.
To recall, the Government allocated 250 mln drams ($676 thousand) for subsidizing the interests on agricultural loans. The government funds will allow reducing 4% the interests on loans provided to farmers and 6% to 200 especially vulnerable communities. Three banks are involved in the program: ACBA-Credit Agricole Bank, Ardhsininvestbank and Converse Bank. The total amount of loans to farmers will make up 6-10 bln drams. The upper ceiling of a loan is 2-3 mln drams and the maturity is 3 years with a 6-month grace period.
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