Int’l Financial Co. Extends $2mln Loan to Armsavingsbank


YEREVAN, July 28 (Noyan Tapan). The International Finanical
Corporation (IFC) of the World Bank will allocate a loan of $2mln. to
Armsavingsbank for Small and Medium-Sized Enterprizes (SME) and
mortgage crediting. The agreement was signed by Ashot Osipian,
Executive Director of Armsavingsbank and Edward Nassim, Director of
the IFC Central and Eastern European Department in Yerevan July
28. A. Osipian told reporters the loan will be allocated in two
tranches to be repaid within five years. $1.5mln. will be used to
extend credits to the SMEs operating in the spheres of industry,
construction, services and trade. The largest size of those loans will
be $150,000 with a due date of payment five years and with annual
interest rates of 14%-20%. The bank will extend mortgage loans both
for the purchase and repair of dwellings. The largest size of the
loans in the first case will be $30,000, in the second case
$15,000. The loans will be extended with a repayment date of up to
five years, and with an annual interest rate of 14%. A. Osipian also
said the Armsavingsbank is currently extending mortgage loans with a
repayment date of four years and with an interest rate of 16%. He gave
assurances that the bank now has a package of 100% healthy mortgage
loans of $900,000. he said the main obstacle to the sphere’s
development is the procedure of working credit technologies which is
being gradually processes. According to Nassim, this deal is the first
investment of IFC in the Armenian banking system. Before that the
corporation invested $5mln. in the Marriott Armenia hotel and another
$2mln. in the ACBA Leasing company. He also said the corporation is
planning to establish a foundation in Armenia with its own funds
though no relevant final decision has yet been made. Edward Nassim
stated IFC studied the Armenian banking system four years ago and
decided it was too early to make investments in it. This deal
testifies that the Armenian banking system has developed and is
trustworthy now. He said mortgage loaning is of great interest for IFC
since it develops both the middle layer of the population and the
construction sphere of the country. Chairman of the RA Central Bank
Tigran Sargssian said the Central Bank welcomes this cooperation.

It will enable the Armsavingsbank to provide new services in large
volumes which will intensify competition in the banking sphere as a
result of which the system will get sronger. Armsavingsbank is the
fourth among the Armenian banks with the volume of its assets
($33.4mln.). The capital of the bank totaled $5.3mln. as of January
1. It has 24 branches and 450 workers. IFC, founded in 1956, is a
member of the World Bank. It aims to fund investments in the private
sector, attract free means in circulation on the international market,
as well as to assist the developing and transition countries. So far,
the corporation has extended loans of over $37bln. from its iwn funds
and over $22bln. from the attracted funds.