Monday, June 13 2011 11:40
ProCredit Bank boosts agriculture lending
ArmInfo. Interview with Ashot Abrahamyan, Deputy Executive Director of ProCredit Bank
What made the bank to participate in the state agricultural lending program considering that the given sector was not prior to it?
ProCredit Bank launched agricultural lending in Q4 2009. It has become one of the prior sectors for financing for the bank given the economic and social importance of agriculture for development of economy as well as the share of the agrarian sector in economy. We think that the stiffened competition in the agricultural sector will have a positive impact on the financing of the sector.
What the bank has already done under the given program? And what is the limit of financing for 2011?
ProCredit Bank has already allocated 170mln AMD under a state agriculture lending program, and may increase financing under the given program to 1.2 bln drams till the end of the year. Agriculture is one of the bank's priorities with the share of agricultural credits in the bank's loan book being 9%. In 2011 we are planning to increase the agricultural loan portfolio by 2bln AMD.
How do you regulate risks in the sector?
Agro-business as the most risky sector for investing requires special approaches, including agro- technologies, specifics of financing of agrobusiness and knowledge of agro-traditions of our population. We conduct financial analysis of the business or household economy of a specific customer, his potential development and offer optimal conditions of lending, interest and repayment.
Will the bank join any new credit programs or take a subordinated loan?
The bank has already raised $10 million from international financial institutions over the last six months. ProCredit Bank precedes negotiations with reputable international institutions with the purpose of attracting new credit funds for on-lending to small and medium-sized enterprises.
Does the bank plan capitalization?
We are not going to increase the statutory capital in the current year. However, within the coming years it will be replenished probably through raising subordinated loans.
Do you plan involvement in the consumer lending market?
At present ProCredit Bank offers personal loans for repair and acquisition of household equipment and furniture as well as other personal loans. The upper ceiling is 11 mln drams and maturity is up to 5 years. The target group is our customers using the full spectrum of banking services. Consumer loans up to 1.5 mln drams are provided without existence of a guarantor.
What are the plans for expansion of the branch network?
ProCredit Bank will shortly open two new branches in Yerevan, in Komitas Str. and Tigran Mets Str.. The branches will provide full package of banking services to both individuals and companies. It is strategically important for the bank to have branches in all communities of Yerevan and in other towns of Armenia.
What about demand for Internet-banking services?
The bank launched Internet-banking in November 2010. Demand for this service is constantly growing. The share of on-line transfer orders is 20%-25% of total. The bank keeps improving the given product to increase the number of users.
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