Abgaryan: If there is an insurance policy of the Export Insurance Agency, exporters can obtain affordable loans at a rate of 7% per annum

ArmInfo. If there is an  insurance policy of the Export Insurance Agency of Armenia (EIAA),  Armenian exporters can obtain financial factoring at 8 commercial  banks at affordable interest rates, without collateral and on  favorable terms.

The Executive Director of ESAA Vazgen Abgaryan at a  press conference announced this on April 11, noting that the rates  for loans in the currency start at 7% per annum, and some partner  banks provide financing without commission. "This will allow the  exporter to avoid currency risks and more effectively manage working  capital," he stressed.

Abgaryan explained that immediately after crossing the goods of the  customs border of Armenia, the exporter without collateral can  receive financing from the bank for up to 90% of the value of the  goods cost, which will allow to keep its working capital in the  medium term. At the same time, he noted that for the entire financial  package the exporter will pay a commission of 1.2-1.3% of the value  of the exported goods. According to him, as part of the trading  factoring of the incoming 60 applications, 36 have already received  approval for obtaining an insurance limit.

In particular, he stressed that in 2015 EIAA cooperated only with 1  commercial bank, whereas in 2016 their number increased to 8, and  with another three negotiations on cooperation are under way. "This  will allow exporters to be serviced in the bank where they have  accounts opened and current assets, which will greatly simplify the  process of obtaining financing," he said.

O note, the "Pre-export financing" service of EIAA was launched in  the Armenian market in the spring of 2016, and involves providing  financing to exporters up to 80% of the value of the volume of  exported products at the production stage, in particular for the  purchase of raw materials and for covering transportation and customs  expenses. EIAA undertakes to cover 95% of the risks of partner banks.   To note, the Insurance Company CJSC "Export Insurance Agency" was  established in late October 2013 by the decision of the Government of  the Republic as an effective tool for export promotion .The main  function of the Agency is insurance of exporters (small and medium  enterprises) that are residents of Armenia from financial risks  (losses) in those cases when the foreign buyer does not fulfill his  obligations under the export contract on the terms of payment for  goods placed in installments. Trade risk, when the buyer refuses to  pay due to bankruptcy or without legal justification, or political  risk in case of restriction of trade or bank transfers, prohibition  or restriction on currency exchange, as well as natural disasters,  wars and inability to pay due to other political events.