The European Bank for Reconstruction and Development (EBRD) is boosting its support for micro, small and medium-sized businesses (MSMEs) in Armenia by extending new financing to Armeconombank.
According to the EBRD press service, the EBRD’s loan of up to US$ 10 million (€9.2 million) will be provided in Armenian drams under the EBRD’s SME Local Currency Programme and is supported by a 12.5 per cent first-loss risk cover arrangement funded by the same programme.
Francis Malige, EBRD Managing Director for Financial Institutions, signed the agreement with Artak Arakelyan, CEO of Armeconombank, on the sidelines of the 33rd EBRD Annual Meeting and Business Forum, which is being held in Yerevan.
The EBRD funding will support Armeconombank’s growth strategy, to diversify and expand its services in the MSME segment, focusing on regional clients. The loan will strengthen Armeconombank’s funding base and enable the bank to meet growing demand for long-term local-currency financing for MSMEs. In addition, the project plans to promote economic inclusion by intending to allocate 50 per cent of the loan proceeds to on-lending to women-led businesses.
Specialising in MSME lending and with an extensive presence across the country, Armeconombank is a long-standing EBRD client. It successfully implemented a similar SME-focused project funded by a US$ 6 million EBRD loan back in 2017.
This project is in line with the Bank’s strategic priority in Armenia to develop the financial sector and improve access to finance.
The EBRD is a leading institutional investor in Armenia, investing around €2.12 billion through 211 projects in the country to date. Ninety-two percent of those investments have been in the private sector.
