ArmInfo. The European Bank for Reconstruction and Development (EBRD) and the European Union are joining forces with Acba bank to boost the availability of funding for Armenian micro, small and medium-sized enterprises (MSMEs).
The EBRD is providing a €25 million unfunded risk-sharing instrument to one of Armenia’s leading banks to unlock new financing for local firms. This guarantee will cover up to 50 per cent of the credit risk associated with €50 million in newly originated financing for the private sector from Acba bank. The EU is supporting this instrument through its European Fund for Sustainable Development Plus (EFSD+) guarantee programme, which enhances financing and investment operations in partner countries outside of Europe.
The guarantee agreement was signed by Hakob Andreasyan, CEO of Acba bank, and EBRD President Odile Renaud-Basso, during the EBRD’s 2024 Annual Meeting and Business Forum in Yerevan.
This is the first time the EBRD has deployed a risk-sharing instrument of this kind in Armenia. It builds on the EBRD’s core commitment to Armenia’s banking system and private sector, while also providing a novel means of responding to unique market demand. The guarantee will further expand financing for local MSMEs, which are critical to the sustainable growth of the Armenian economy. Armenian firms, including agribusinesses, will also be able to benefit from tailored consultancy services to help them grow in export markets.
Acba bank is one of the largest Armenian banks and a longstanding partner of the EBRD, with cooperation between the two spanning two decades and focusing on the MSME segment.
According to the Financial Rating of Armenian Banks as of January 1, 2024, prepared by ArmInfo IC, Acba Bank holds the lead in the volume of lending to SMEs - 231.4 billion drams or $57.2 million, ensuring an annual growth of this portfolio of 30%. In the Bank's loan portfolio, SMEs account for about 44%, and in the total market volume, Acba Bank's share exceeds 18%. The Bank most actively finances the agricultural sector - 20% of the loan portfolio, slightly less - 11-12% - the construction, catering and service sectors, and 9% or more goes to the industrial sector and trade.
In terms of total volume of loan investments, Acba Bank is in the TOP-5 - 527.8 billion drams or $1.3 billion, with an annual growth of 13%. In terms of assets, Acba Bank is also among the top five - 783.5 billion drams or $1.9 billion, with an annual growth of 18%. For 2023, Acba Bank increased its net profit by 27% - to 28.6 billion drams or $70.6 million, gaining a foothold in the TOP-3.
The EBRD is a leading institutional investor in Armenia. The Bank has invested more than €2 billion in 211 projects in the country to date, where it supports private-sector development and the transition to a sustainable, green economy.
