Monday, March 23 2020 15:35

ArmInfo. In order to eliminate the economic consequences in Armenia due to coronavirus, the first draft of measures was developed to assist economic agents in co-  financing, refinancing loans and subsidizing interest rates. Prime  Minister Nikol Pashinyan announced this on March 23 on his Facebook  page.

According to the information provided by the head of the Government  of the Republic of Armenia, according to this project, in the  Republic of Armenia a business entity is: a private commercial  organization or private entrepreneur (with the exception of financial  organizations - banks, credit organizations, pawnshops and insurance  companies) that conduct business in the Republic of Armenia during at  least, one year, and have a good credit and tax history. For each of  the economic entities, only one assistance tool is possible, of the  ones envisaged by the project - co-financing, refinancing and  subsidizing of interest rates.

In particular, assistance is provided to cover the following  expenses: salaries, but for each employee, no more than 500 thousand  drams per month for a maximum of three months; tax payments to state  or local budgets, payment of duties and other obligatory payments;  purchase of raw materials or imports, provided that the entire volume  must be used in Armenia in order to obtain finished products and if  the economic entity has the necessary and appropriate production  capacity; import of equipment that will be used without fail to  organize production in Armenia or to expand production; payment for  public services (electricity, water, gas, communications,  telecommunications), but provided that no more than 5 million drams  for each of the services and for a maximum of three months; import of  food products by trading companies, provided that the purchased or  imported products will be sold exclusively in the territory of the  Republic of Armenia.  The maximum loan amount to one economic entity,  within the framework of the assistance tool, will be 500 million  drams, and the maximum amount of co-financing or refinancing of one  business entity will not exceed 250 million drams. Credit funds can  be used exclusively by bank transfer or through bank transfers.  The  maximum integral rate depending on the assistance tool used will be  in the range from 0% to 6% (not higher than 6%). All banks and credit  organizations operating in the Republic of Armenia will provide  loans.

In particular, the co-financing of the loan will be provided to the  economic entity in the amount of a certain part of the principal  amount of the loan, with the same repayment term, with a 0% interest  rate on co- financing, covering part of the risks associated with the  repayment of the principal amount of the loan.  Refinancing - a  certain part of the principal amount of the loan (in some cases the  full amount established by this event), with the same loan term, at a  0% interest rate without covering the risks of repaying the loan.   Subsidies will be made by a certain part of the interest of the loan  (in some cases, the full amount established for these activities),  for the entire loan term, without covering the risks of repayment.

According to the Prime Minister:  In case of compensation of  employees' salaries, the amount of co-financing will be 50%,  refinancing - 100%, and subsidizing rates is provided in full; In  case of paying taxes, duties and other obligatory payments,  co-financing will be 50%, refinancing - 100% and subsidizing rates -  in full; In case of importing equipment: co-financing - 25%,  refinancing - 50% and subsidizing rates - 5%; Raw materials purchase:  co-financing - 40%, refinancing - 50%, subsidized rates - 6%; Utility  bills: co-financing - 45%, refinancing - 90%, and subsidized rates -  10%; Food imports: co-financing - 30%, refinancing - 50%, subsidized  rates - 8%.  Assistance will be provided if the maximum percentage of  the financial institution's integral is 12%, and part of the loan in  part will be provided in drams (in the case of wages, taxes, duties,  utilities and other obligatory payments). In other cases, the maximum  percentage of the integral will be 12% in drams, and 9% in currency.