GERMANY PLANS TO ASSIST ARMENIA IN DEVELOPING MORTGAGE MARKET
YERENAN, October 23 (Noyan Tapan). The process of creating
infrastructures necessary for the long-term mortgage crediting in
Armenia may finish in 2008-2010. The CB Chairman Tigran Sargsian told
journalists about this on October 22. According to him, the mortgage
market cannot develop without “long money”, and in order to create
this it is necessary to have developed pension funds, investment and
insurance companies. According to T. Sargsian, in these three
directions Armenia must implement smooth reforms. “Long money” will
enable the banks to provide mortgages of 30-35 years maturity instead
of credits of 3-7 years maturity, which are presently provided. At
present the crediting resources of Armenia’s commercial banks are
formed by deposits of up to 5 years maturity. It was noted that in
2002-2003 the banks provided mortgage credits of only $7.1 million,
most of which was provided to the banks’ employees. According to the
CB Chairman, the respective legislative field should be improved in
order to develop the mortgage market. The banks implementing mortgage
crediting should be “protected” and, if necessary, have no problems
selling the security. According to T. Sargsian, the problem of
securities is of great importance: it should be possible “to buy and
sell” credits. It is envisaged to set up secondary operators in order
to conduct the purchase and sale of mortgage bonds. T. Sargsian also
stated that at present a mortgage crediting program is being developed
with the German government, and if the German side provides
assistance, the development of this field will be considerably
promoted in Armenia. It was also mentioned that the meeting of the
Armenian-German Fund’s Board of Trustees will be held on November 1 in
Germany.