Wednesday, November 5 2014 13:09
Converse Bank receives second tranche of EBRD loan for SMEs in the amount of USD 2.5 million
ArmInfo. In 2015, Converse Bank will further expand its micro, small and medium enterprises (MSME) financing program.
The press service of Converse Bank has told ArmInfo that the bank has received the second tranche in the amount of USD 2.5 million out the USD 5 million equivalent synthetic loan attracted from the European Bank for Reconstruction and Development (EBRD). The EBRD's financing enables Converse Bank to offer advantageous lending terms in national currency for SMEs.
"We highly emphasize the continuous cooperation with the European Bank for Reconstruction and Development and generally value the trust of our international partners toward Converse Bank. The synthetic loan received from the EBRD will enable the Bank to provide long-term financing to micro, small and medium-sized businesses on beneficial terms. And, as far as the loans are on-lent in Armenian drams, our customers will be protected against the exchange rate risks," Converse Bank CEO Tigran Davtyan said.
The source says that SME financing has been continuously the focus of Converse Bank. The Bank constantly develops and expands services offered to corporate customers. Today, Converse Bank offers high quality financial services to SMEs, including various credit facilities and trade finance, as well as preferential rates for loyal customers. The cooperation between Converse Bank and EBRD has proved very productive. Most recently, a credit limit of USD 4M has been established for Converse Bank under the EBRD's Trade Facilitation Program.
The specified synthetic loan is the fourth project within the frames of EBRD-Converse Bank cooperation. In November 2008, the EBRD lent USD 10 million to Converse Bank to finance SMEs. In 2009, Converse Bank and the EBRD signed a Trade Finance Facility, under which the EBRD declared Converse Bank as an issuing bank. In May 2011, the sides concluded a revolving credit agreement (RCA) to finance import and export operations.
To note, the EBRD is one of the largest investors in Armenia. Armenia has been cooperating with the EBRD since 1994. The EBRD has implemented in Armenia a total of 130 projects worth over 730 million EUR. 94% of the EBRD's investments fell on Armenia's private sector. In 2014 the EBRD's loan book in Armenia is expected to be 75 mln EUR, and in 2015 - 100 mln EUR.
According to the Financial Rating of Armenian Banks by the Agency of Rating Marketing Information (ArmInfo), as of 1 July 2014, the SME loan book of Converse Bank totaled 11.7 bln AMD (up 17.1% in H1 2014, over 2-fold growth in Q2 2014). The share of SME lending in the total loan book of the Bank is over 13%, and the portfolio of corporate loans is 32%. Converse Bank has been operating since 1993. The shareholders of the Bank are Advanced Global Investments LLC (controlled by Argentine businessman Eduardo Eurnekian) with a 95% stake and the Mother See of Holy Etchmiadzin with a 5% stake.
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