Wednesday, May 25 2011 11:28
Bank VTB (Armenia) established a letter of credit limit for MAP Company
ArmInfo. VTB Bank (Armenia) CJSC has established a letter of credit limit for MAP Company, VTB Bank (Armenia) Director General - Chairman of Directorate Valery Ovsyannikov said during the visit to the plant in Armavir, Tuesday. The bank will extend mutually advantageous cooperation with lead companies of Armenia.
"We think that it is economically viable to fund, first of all, processing companies, such as MAP plant, for instance. In their turn, these companies help farmers with interest free advance payments," the banker said.
For his part, Aleksan Petrosyan, the owner of the MAP Company, said that the bank has already provided the company with $4 mln. He did not mention the total amount of the credit limit, however. Under the letter of the credit limit, Petrosyan said, the company paid nearly 400 mln drams to farmers and agricultural economies in terms of advanced payments. Farmers spent those funds on fertilizers, seeds etc.
Commenting on the technical and technological backwardness of the agricultural sector, the banker said that it lags behind the agricultural sectors of developed world for 10 years.
"The state of the crop lands is poor, and there is acute need of modern equipment," Ovsyannikov said. He said that banks are ready to provide agricultural equipment to farmers, including on leasing, which requires the government's support, however.
He believes that there is need for government subsidies to processing enterprises and not farmers. V. Ovsyannikov thinks that subsidizing loans to farmers is not a 100% solution to the problem.
Ranking of the Armenian Commercial Banks prepared by the Agency of Rating Marketing Information ArmInfo says the credit exposures of VTB Bank (Armenia) totaled 99.5 bln drams as of April 1 2011 (up 17% for Q1 and 23% per annum). The share of loans to economy was 59.7 bln drams (4th position in the banking system) or 60% of total loan portfolio (up 14% for Q1 and 40% per annum). Agricultural loans totaled 2.9 bln drams or 3% of total portfolio (6th position in the banking system).
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