Agriculture Ministry of Armenia and ACBA-Credit Agricole Bank to sign memorandum of understanding and cooperation

ArmInfo. Agriculture Ministry of Armenia and ACBA-Credit Agricole Bank will sign a memorandum of understanding and cooperation soon. Hakob Andreasyan, CEO of ACBA-Credit Agricole Bank, and Sergo Karapetyan, Minister of Agriculture made an arrangement on it, on March 9, according to the Ministry.

Minister Karapetyan said that under the state project of agricultural subsidies for farms, dram loans will be provided at the annual interest of 8%. To boost the agriculture sector agricultural cooperatives should be established. To that end, the Ministry suggested providing loans on preferential terms.

ACBA-Credit Agricole Bank CEO Hakob Andreasyan, in turn, welcomed the idea saying the Bank will provide loans on preferential terms to agricultural cooperatives. In addition, he said, the Bank can implement projects to exchange experience with specialists in France through sending the heads of local cooperatives to France or inviting French experts to Armenia for consultations.  At the end of the meeting, Andreasyan assured the minister that the Bank will display an individual approach to all potential borrowers in the field. 

According to ArmInfo's Financial Rating of Armenian Banks, the portfolio of agricultural loans reached 164.5 billion drams on Jan 1, 2016 (over $340 million) with an 18.3% year on year growth (versus 22.6% growth in 2014). ACBA-Credit Agricole Bank accounted for more than 50% of agricultural loans provided by the local banks on Jan 1 2016. The Bank is specializing on agricultural loans, so this type of loans account for 40% of its total loan book.

The government program of agricultural loan subsidies to farms started in the country in April 2011. Loans are provided at the annual interest of 14%, with the government subsidizing 4%-6%. The loan maturity is 3 years. The most active participants in the government program are ACBA-Credit Agricole Bank, Ardshinbank, and Converse Bank.