ArmInfo. Budgetary expenditures on subsidizing interest rates of agricultural loans are reduced in 2016 to 1.163 bln AMD versus 15.2 bln AMD in 2015. Subsidizing of interest rates of agricultural loans under the state program 2016 started on March 1, relevant decision was made at the government's session today.
As Armenia's Agriculture Minister Sergo Karapetyan stated in 2011-2015 farmers were provided with around 99 thousand affordable credits in total amount of 84.2 bln AMD at 14% annual interest rate. 4% of the rate was subsidized till 2015 and in 225 most disadvantaged villages 6% were subsidized. Since 2015 6% was subsidized for all the individual farmers.
In 2015 the subsidies on agricultural loans totaled 15.2 bln AMD. According to the Minister throughout 2016 1.163 bln AMD will be provided on subsidies. "Taking into account the importance of the program and necessity of early launch of spring field work a decision was made to start subsidizing interest rates earlier than scheduled- from March 1 to December 31", Karapetyan informed.
According to the Financial Rating of Armenian Banks, prepared by ArmInfo, agricultural loans portfolio reached 164.5 bln AMD as of January 1, 2016 (more than 340 mln USD) with 18.3% year-over-year growth (versus 22.6% growth in 2014). ACBA-Credit Agricole Bank
accounts for more than 50% of the total agricultural finance by the banking system of Armenia as of January 1, 2016. As this bank is mainly specialized in agricultural crediting, the share of these loans in its credit portfolio reaches almost 40%.
To note, the state program for subsidizing interest rates of agricultural loans launched in Armenia in April 2011. Loans under this program are provided at 14% annual interest rate from which 4- 6% are subsidized by the government. The loan term is 3 years. ACBA-Credit Agricole Bank, Ardshinbank, Converse Bank, ProCredit Bank and Artsakhbank are the participants of this program.