ARARATBANK and EFSE Fund signed $ 15 mln loan agreement for the  development of micro and small business

ArmInfo. ARARATBANK and the European Fund for Southeast Europe (EFSE) have signed a synthetic loan agreement for a dram amount equivalent to $ 15 million, which  will be used to develop micro and small businesses in Armenia. On  April 3, the Chairman of the Board of ARARATBANK Ashot Osipyan  informed this at a press conference.

According to A. Osipyan, loans to businesses will be provided with a  maturity of up to 5 years at an average interest rate of 9% per  annum, without restrictions in terms of the scope of activities. In  particular, as he noted, over the years of cooperation with the Fund,  approximately $ 63 million were attracted, which were directed to  lending 2 thousand micro and small businesses in various sectors of  the economy, including light industry, jewelry, services, trade ,  construction, etc.

At the same time, he noted that cooperation with EFSE is valuable,  first of all, not due to attracted funds, but to technologies,  technical re-equipment and management culture that the bank adopts  and implements.  In particular, in this vein, A. Osipyan emphasized  the risk-oriented approach to conducting an audit introduced in 2015,  thanks to which ARARATBANK today works in accordance with  international standards. He also considered the mapping of  operational risks as technological innovation.

In turn, the Chairman of the EFSE Council, Christoph Tiskens, noted  that he was pleased with the long and successful cooperation with  ARARATBANK.

Answering the question of ArmInfo regarding the Armenian economy,  C.Tiskens noted that he had the impression of a generally  satisfactory situation.

To note, the European Fund for Southeast Europe (EFSE) was  established in 2005 with the aim of contributing to the development  of the economy and general welfare in the countries of South-Eastern  Europe, in particular Albania, Armenia, Ukraine, Serbia, Azerbaijan,  Belarus, Bosnia and Herzegovina, Bulgaria, Macedonia, Georgia,  Kosovo, Moldova, Montenegro, Romania. The fund provides local  financial institutions with long-term subsidies for lending to micro  and small enterprises, as well as medium-sized enterprises and  low-income private households. In general, since its establishment,  EFSE has directed 922 million euros to finance commercial banks,  microfinance institutions, and non-financial institutions, thereby  making it possible to issue more than 247,000 loans to small and  micro businesses and private households.

According to the Financial Ratings of Banks of Armenia as of December  31, 2018, prepared by ArmInfo IC, loan investments of ARARATBANK  reached 126.5 billion drams ($ 261.6 million). In the loan portfolio  of the bank, the share of loans to SMEs exceeds 45%, amounting to  57.7 billion drams in absolute terms (6th position in the market),  with a y-o-y volume growth of 13.8%. And in total credit investments  of banks in the sphere of SMEs, the share of ARARATBANK reaches 8%.  2019 ARARATBANK finished with a net profit of 2.3 billion drams ($  4.7 million), with y-o-y growth of 9.7%. "ARARATBANK" OJSC has been  operating since November 2005. Majority shareholders of ARARATBANK as  of on January 1, 2019 are one of the largest oil traders in Armenia-  Flash company with a share of 72.73% in the capital, Barsegh  Beglaryan (well-known entrepreneur, the head of Flash)- 18.33%, Rural  Impulse Fund II (part of the Belgian structure Incofin Investment  Management - Incofin IM) - 8.58%.