Ameriabank to provide factoring financing to exporters under cooperation agreement with Export Insurance Agency of Armenia

ArmInfo. Ameriabank under  cooperation agreement with Export Insurance Agency of Armenia will  provide factoring finance to exporters. On October 28 Ameriabank and  Export Insurance Agency of Armenia signed a cooperation agreement,  the press- service of the Bank informs. The aim of the agreement is  to insure Armenian exporters against non-payment on the part of  partners due to trade and political risks. Under the new scheme,  while using factoring services exporters not just get payment for  their goods in advance and are thus able to increase their cash  turnover, but are hedged against possible non-payment on the part of  buyers. Providing factoring finance in the currency of export  contract helps to neutralize possible adverse impacts of exchange  rate fluctuations.  

Artak Hanesyan, Chairman of the Management Board-General Director of  Ameriabank, said: "Ameriabank is very active in factoring operations,  with a more than 49 billion USD factoring portfolio over the 9 months  of 2016. Export factoring amounts to about 80% of our factoring  deals. This agreement enables us to streamline factoring finance and  hedge its risks and in the long-run will help boost Armenian exports  and bring more money into the country". 

Vazgen Abgaryan, Chairman of the Management Board and CEO of Export  Insurance Agency of Armenia, said: "Due to collaboration with  Ameriabank the users of our services will be able to manage their  working capital more effectively during the deferred payment period  following export. They will be able to increase their production and  expand to new markets, now they are properly insured against  non-payment risks". 

According to Financial Ranking of Armenian Banks prepared by ArmInfo  occasional banks are conducting factoring transactions, the aggregate  amount of factoring portfolio of which totals only 25.3 bln drams as  of July 1 2016, which slightly exceeds 1% in total loan portfolio of  the banking system. In year-over-year terms the aggregate amount of  factoring transactions of the banks increased by 27%. Only 7 banks  out of running 19 conduct factoring: ACBA-Credit Agricole Bank, VTB  Bank (Armenia), Ameriabank, Armbusinessbank, ArmSwissbank,  Artsakhbank and Converse Bank. In total factoring porfolio of the  banks the share of Ameriabank made 26.6% as of July 1 2016. In  overall factoring market is not much developed in the country and  long-lasting efforts of creating factoring companies in Armenia have  been crowned with success quite recently.  Particularly, in August  2016 the Central Bank has registered new universal credit company  "First Factoring Company".