ArmInfo. Armenian commercial banks began to show an increased interest in cooperation with the Export Insurance Agency of Armenia (EIAA), Executive Director of EIAA Vazgen Abgaryan told ArmInfo correspondent.
"If earlier we asked banks to consider the possibilities of partnership with the agency, now the situation has changed in many respects - the institutional confidence of banks has increased, over the past year the number of partner banks has increased from 1 to 8," Abgaryan said. This trend, according to the head of the state company, is quite logical, as the banks are motivated by the specific practice of the EIAA in agreements with other financial structures and increasing turnover.
First, as Abagaryan explained, the banks that are most active in the field of trade finance, then the less active players in this market, join the cooperation. The expert connected the phased connection of the banking community to cooperation with the EIAA with the natural desire of the creditors to "hang" 100% of the risks on the Agency. "Naturally, this is impossible, because any insurance product should be logical and can not cover those risks that do not come from the deliberate violation of the export contract," he said. At the same time, Abgaryan stressed: "When the real estate market is not so liquid and forecasts are ambiguous and volatile, the availability of insurance policy as primary security is growing. And banks began to understand this".
To 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 buyerrefuses 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.