YEREVAN, NOVEMBER 14, ARMENPRESS: The European Bank for Reconstruction and Development (EBRD) has pledged today 40 million euros in fresh credits to Armenian banks in 2006-2007 to help foster development of small and medium-sized businesses in Armenia.
Michael Weinstein, EBRD resident representative in Armenia, said with dynamically developing economy Armenian entrepreneurs need new credits. He said in the last 3 years EBRD provided 10 million worth credits to several Armenian banks. He said the number of EBRD partners will grow in the next couple of years. Weinstein spoke to reporters after the United States Agency for International Development (USAID) has signed a Memorandum of Understanding with the European Bank for Reconstruction and Development (EBRD) to support the latter’s Armenia Micro-lending Program. Under this two-year agreement, USAID will provide $1.5 million in technical assistance to local banks chosen to participate in the EBRD program.
As part of the Armenia-Micro-lending Program, the EBRD will provide financing ability to partner banks, which will lend funds to Micro and Small and Medium-sized Enterprises throughout Armenia. The EBRD will assume the full commercial risk for the investments made by the local banks. The banks that participate in the program will be chosen based on need, creditworthiness, and the existence of capable management teams. To date, four partner banks have been chosen: Armeconom, Anelik, ACBA, and Ineco. USAID-financed technical assistance will be used to help these partner banks develop their internal lending operations. This will include training personnel, assisting in the creation of efficient lending procedures, creating a diversified loan portfolio, and establishing transparent and objective decision-making mechanisms. By helping local banks develop expertise in providing loans to Small and Medium-sized Enterprises, it is hoped that these banks will be able to increase lending with their own financial resources, thus ensuring more sustainable financing over time.
The United States Government is committed to supporting the Government of Armenia in the promotion of micro, small and medium enterprise development. The U.S. Embassy believes that Memoranda of Understanding such as this one will help to secure a strong foundation for the successful development of financial institutions in Armenia.
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