Thursday, May 19 2011 11:03
Head of VTB Bank (Armenia): Loans to small and medium enterprises are extremely expensive
ArmInfo. At present the interest rates of loans to small and medium enterprises (SME) are extremely high, Director General, Chairman of Directorate of VTB Bank (Armenia) Valery Ovsyannikov said at today's press conference in Yerevan timed to the 5th anniversary the bank when commenting on the high interest rates in Armenia.
According to the banker, the shelteredness of small business in Armenia is not so high to work transparently and obtain pure profit. The lack of transparency of SME, in its turn, limits the bank's opportunities to finance this sector by cheaper resources: "the available risks in this segment are reflected in the current rates", the banker said and added that he sees no opportunities for reduction of the rates in the future.
Nevertheless, Ovsyannikov thinks that a trend for their reduction in the market is being observed. Many banks stated financing small business at the interest rates of 12-14%. "Our banks display a differentiated approach to the issue of interest rates – we have loans at both high and low rates depending on the degree of transaction risks", said Ovsyannikov.
He added that the banks are ready to reduce the margin, but have no intention to assume high risks.
According to the Ranking of Commercial Banks of Armenia prepared by the Agency of Rating Marketing Information (ArmInfo), as of 1 April 2011 provision of crediting of VTB Bank (Armenia) amounted 97.6 bln AMD (3rd position). In the bank's credit portfolio 19.8% or 19.3 bln AMD fell on the industrial sector (5th position), 14% or 13.7 bln AMD - on trade sector (5th position), 8.7% or 8.5 bln AMD - on construction (3rd position), 3.7% or 3.6 bln AMD - on transport and communication (3rd position), 2.9% or 2.9 bln AMD- on agriculture (6th position).
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