Thursday, February 23 2012 18:29
Active work of banks with small and medium enterprises not to lead to accumulation of overdue loans
ArmInfo. The active work of the banks with small and medium enterprises will not lead to accumulation of overdue loans, Chairman of Board of Armenian Development Bank (ADB) Karen Sargsyan told an ArmInfo correspondent.
According to the Ranking of Commercial Banks of Armenia by the Agency of Rating Marketing Information (ArmInfo), in 2011 lending to SMEs grew by 46%, and over Q4 - by 38% to almost 400 bln AMD ($1 bln). The loans are provided to this sphere at the expense of the credit of the World Bank, the Russian stabilization credit, as well as under a number of international programs, including those of the EBRD, the IFC, the German Development Bank KfW and the Asian Development Bank.
"Investments in SMEs are diversified in various spheres, which, in its turn, rules out accumulation of risks in one direction", Sargsyan said. When replying to ArmInfo correspondent's question, he said that the SMEs are currently in tough conditions.
According to the banker, at the moment the share of overdue loans in the total credit portfolio of Armenia is not high. The problem of shortage of cheap and long-term money has become even more relevant for the banks amid the reduction of capital inflow. Furthermore, the ceaseless crisis phenomena have reduced the purchasing power of the population. To illustrate the support of the Bank's clientele, Sargsyan pointed out that the ADB has increased the redemption period of the loans from 4 years to 7 years. He added that in the credit portfolio of the ABD the lion's share (74%) falls on small and medium enterprises. 60% falls on business loans mostly placed in the spheres of trade, industry, public catering, transport and construction.
ArmInfo says that the banking system has not yet restored the pre-crisis lending growth rates. In 2011 the annual growth rates of lending made up almost 34% against the pre-crisis 73% over 2008, and the volume of overdue loans rose from 1% to 5% and is still growing. The biggest volume of overdue loans (over 26%) is observed in the industrial sector, about 20% falls on banking retail.
The state should establish strict rules for its relations with investors, rather than engaging in promiscuous partnerships with them - Artur Ashugyan
Fixing over-ambitious and unrealistic goals most dangerous - expert 
The sale of HSBC Bank Armenia to Ardshinbank to be completed on November 29, 2024
Armenian government approves 2024-2040 demographic strategy 
Armenia`s economy and state competing for sooner collapse - ex-official