GERMAN KFW BANK TO GIVE 20 MILLION-EURO LOAN TO ARMENIA
NOYAN TAPAN
APRIL 19, 2010
YEREVAN
YEREVAN, APRIL 19, NOYAN TAPAN. The Chairman of the Central Bank
of Armenia (CBA) Arthur Javadian and Vice President of KfW Bank
(Germany), Chief of the Europe, Private and Financial Development
Divison Eva Witt signed on April 19 an agreement on the provision of a
20 million-euro tranche for the second stage of the Armenian-German
Fund’s program Development of a Sustainable Market For Housing
Finance in Armenia. The 20 million-euro loan is given for 10 years,
with a 3-year grace period. It is planned to use this loan in the
next 3 years.
The financial institutions, which are partners of the indicated
program, will provide loans to Armenian residents – natural persons
for a minimum period of 10 years, at interest rates of 12-16% for the
purchase of apartments or houses or the repairs of apartments. The
commercial banks iuncluded in the program also receive co-financing
from the German-Armenian Fund.
A. Javadian attached importance to the provision of an additional
loan, reminding that as long ago as 2005 the German Federal Ministry
for Economic Cooperation and Development and the Armenian government
signed an agreement on the implementation of the Development of a
Sustainable Market for Housing Finance in Armenia program. Loans of
12 million euros and grants of 1.5 million euros were provided under
the agreement in 2006-2007.
The CBA chairman said that 9 banks and 2 credit institutions have
been included in the program. Most loans were given to residents
of Armenian regions, their maximum amount made 12 million drams. A.
Javadian did not rule out that as a result of negotiations, it would
be possible soon to increase the maximum amount of provided loans.
According to him, mortgage loans are in demand in Armenia: the total
amount of mortgage loans given by commercial banks is about 83 billion
drams, and it is envisaged increasing it to 110-120 billion drams in
the near future.