The Central Bank of Armenia reports significant changes in the country’s lending structure. According to data presented by Asmik Kagramanyan, a board member of the Central Bank, at a meeting of the parliamentary commission on financial-credit and budgetary affairs on September 2, 2024, Armenia is experiencing substantial growth in consumer and mortgage loans.
Kagramanyan highlighted the correlation between these two types of lending, noting that the growth of mortgage loans often leads to a subsequent increase in consumer loans related to home renovations and other associated expenses. However, she expressed concerns that this trend might not contribute to the long-term economic potential of the country.
Despite the increase in lending, Armenia's banking sector has shown a significant improvement in the quality of its loan portfolios. The share of non-performing loans (NPLs) in the total volume of loans has decreased from 2.8% in 2022 to 2.4% in 2023 and has now reached a record low of 1.2%. Kagramanyan emphasized that this is the best figure in the history of Armenia's banking system.
Earlier, BMG reported that experts have also pointed out the growth rate and structure of loans. In 2024, banks are primarily directing their assets towards consumer and mortgage lending, which they believe is a cause for concern in the current economic climate, as the volume of these loans is growing much faster than economic growth, wage growth, remittances, and so on.
At the same time, the volume of loans in the industrial sector is declining, indicating a lack of efforts to restore economic potential.
