Over 200,000 citizens of Armenia will have the opportunity to escape the debt trap thanks to a new state support program. On December 13, the Government of Armenia approved a decision to assist borrowers whose loans have been deemed unrecoverable for three or more years.
The program is aimed at individuals with a principal debt amount of up to $2,540. According to government data, approximately 218,000 people are included in the target group, with 65% of them being in the most economically active age group, between 26 and 50 years old. On average, each debtor owes around $1,965, including the principal, interest, and penalties.
Under the approved decision, financial institutions will waive 80% of the accrued penalties and fees, reducing the average debt to $1,103 per individual. The government will provide support over a 24-month period, directing the personal income tax from the debtor’s official salary towards repaying the loan. Furthermore, monthly repayments will not exceed 20% of the individual’s salary.
“This initiative aims to help citizens restore their economic activity, return to using modern financial tools, and resume contributions to the country’s pension system,” states the justification for the decision.
