ArmInfo.As a result of a new partnership between Acba Bank and the International Finance Corporation (IFC), ACBA will allocate $50 million to finance and develop micro, small and medium enterprises (MSMEs) in Armenia, as noted in a statement by Acba Bank.
According to the explanation in the statement, this means that IFC will share the risk of repayment of up to 50% of loans provided by Acba Bank in the amount of $50 million. (we are talking about the risk sharing facility - ed.). This partnership will allow Acba Bank to further expand its financing to micro, small and medium enterprises in Armenia. "This new partnership with IFC is an important project. It is aimed at supporting MSMEs. The program is about sharing risks. IFC thus supports us to be bolder, to actively and boldly finance micro, small and medium enterprises. I believe that we can allocate these funds very quickly," said Hakob Andreasyan, CEO of Acba Bank.
"This risk-sharing partnership with Acba Bank is important for Armenia, as it supports the country's sustainable and inclusive development. With this project, we will contribute to the financing of micro, small and medium enterprises in Armenia, in particular, by addressing the challenges they face in attracting financial resources. It is very important that women-owned businesses also benefit from the partnership, as barriers to financing are particularly pronounced in women-owned SME sector, in rural areas, and in agribusiness," said Marcelo Castellanos, Senior Regional Manager, IFC's Financial Institutions Group in Europe.
It should be noted that the International Finance Corporation (IFC) is a member of the World Bank Group, focused on the private sector in emerging markets. It works in more than 100 countries, using its capital, experience, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. The project mentioned above is part of IFC's Small Loan Guarantee Program supported by the European Fund for Sustainable Development (EFSD) of the European Commission. This program combines the efforts of IFC and partner financial institutions to use a risk-sharing facility aimed at assisting small businesses in reducing financial risks. According to the Financial Rating of Armenian Banks as of September 30, 2024, prepared by ArmInfo Investment Company, Acba Bank ranks in the TOP-3 for lending to SMEs with a volume of $619 million. Acba Bank holds over 15% of the total volume of these loans in the market, and the share of SME loans in the banks total loan portfolio exceeds 43%. The total volume of these loans in the banking market exceeds $4 billion.
