Monday, May 19 2014 13:47
MP: High interest rates at banks are one of the reasons of large-scale migration from Armenia
ArmInfo. One of the problems that have caused large-scale migration from Armenia is the high interest rates at the banks. People simply sell their property to repay their loans and leave the country, Secretary of the Prosperous Armenia Party Faction (PAP) Naira Zohrabyan said in Parliament on Monday. She said that the PAP Faction will take no part in the election of the Central Bank's Chairman.
Zohrabyan said that the unprecedentedly high interest rates stifle Armenia' economy and result in closure of a plenty of enterprises, especially small and medium ones, as well as farm entities. Zohrabyan said that during the meeting with Artur Javadyan, candidate for Chairman of the Central Bank of Armenia, the latter pointed out that credit recovery in Armenia is almost 98%. In this case, Zohrabyan wonders why there are so many bankrupt enterprises and why the commercial banks always raise the issue of risks if the risks have considerably decreased. Zohrabyan stressed that the banking system in the country cannot be considered to be stable in case of large-scale closure of enterprises. "To whom do the banks lend money in this case and how can the banking system be stable in this situation?" she said.
To note, according to the Analytical Bulletin "Financial Ratings of Armenian Banks", as of 1 April 2014, the level of NPLs in the Armenian banking system is 7.5% of the total loan book. A year ago this index was 5.9%. In absolute terms, overdue loans grew by 30% year-over-year, and in Q1 2014 the bad loans grew by 20%. According to independent experts, given the high debt ratio, the real NPLs make up 13-15%.
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