State assistance program on financial leasing of equipment for agricultural processing enterprises approved

ArmInfo. Enterprises of the  Armenian agricultural complex will be able to take advantage of new  opportunities to purchase equipment for leasing starting already from  this year. The program of state assistance to financial leasing was  approved at a meeting of the government on July 19.

The program in particular envisages ensuring financial availability  of modern equipment for villagers through the use of appropriate  financial mechanisms. In total, it is envisaged to allocate 1bln AMD  during 8 years from the state budget to subsidize interest rates. In  2018 alone 119.4 million drams will be allocated for these purposes.

The beneficiaries can take advantage of the program once in 8 years.  Equipment will be provided at an interest rate of 11% per annum, up  to 7% of which will be financed by the state. The recipient of the  funds undertakes to pay an advance payment of 20% of the cost of the  equipment.

For agricultural processing enterprises, the total cost of leasing  equipment should not exceed 230 million drams, and for small farms 30  million drams. The first payments under the leasing program should be  made by business entities after three months. The program is designed  for enterprises engaged in livestock, poultry, fish farming, plant  growing, greenhouses, driers.

Implementation of the program, as the RA Minister of Agriculture  Artur Khachatryan informed, will allow not only to modernize the  units of the agro-industrial field, but also increase the efficiency  of agricultural production and its competitiveness, increase  production and export of products. The project does not cover the  purchase on leasing of agricultural machinery, for which there is  another state assistance program.

The Minister noted that from 50 to 80% of equipment at the processing  industry enterprises are worn-out and obsolete.  Independent experts  interviewed by ArmInfo assess the volume of agroleasing in Armenia at  a rate of 500 million to 1 billion drams a year. They note with  disontent that the development of the leasing business in the country  is hampered by the absence of a law on leasing, as well as the VAT  problem with leasing payments, and the complexity with depreciation  charges.