LEASING STATE SUPPORT PROGRAM OF
AGRIFOOD SECTOR EQUIPMENTS IN ARMENIA
Leasing is provided to private entrepreneurs, legal entities, including agricultural cooperatives, for the purpose of obtaining agribusiness equipment, in the following fields:
* Livestock breeding, including cattle breeding, sheep breeding, pig breeding, poultry farming, fish breeding, beekeeping and industrial grazing
* Crops, including greenhouse farming
* Refrigerated storage, including milk processing plants and milk transporting isothermal tanks
* Activities of sorting and packaging of fresh fruits, vegetables and legumes, also processing of legumes
* Agro-processing industry
Leasing is provided for up to 8 years with maturity, depending on the type of leasing object.
The currency of the leasing
20% of the value from the lease object
Nominal interest rate
11% annualy, of which 7% is subsidized, as a result the lessee pays 4% for credits in AMD currency.
The same leaseholder may benefit from the Program once and the cost of equipment acquired within the Project should not exceed 450.0 million Drams (the cost of the leasing object includes the price of obtaining the leasing object, the cost of importing the leasing object to the Republic of Armenia (transportation, including other costs connected with the transportation, custom clearance, value added tax, etc.).
The equipment should be purchased from the manufacturers and (or) from the retailer, which will provide warranty and (or) post-warranty service of the equipment, or will do it through a resident legal entity of the Republic of Armenia guaranteed by them.
The subsidization of the leasing is stopped, if:
a. there are overdue liabilities to the lessor for more than 60 days cumulatively in one year period (last 12 months) or, because of overdue liabilities to the lessor, leasing is not classified in standard class according to “Resolution 63 on Approval of Procedure on Classification of Loans and Receivables and Creation of Possible Loss Reserves for Banks Operating in the Territory of the Republic of Armenia” approved by the Central bank of Armenia on 23.04.1999 and confirmed by the Ministry of Finance and the Ministry of Economy on 04.06.1999.
b. as a result of monitoring, it is found that the conditions of storaging of the leased asset do not meet the established requirements and there is a violation of the terms of the Program.
In case of improper use of the leasing by the non-targeted and / or subsidizing of the lease, the amount of subsidization provided before that date is subject to refund.
Lease Payment Procedure
Grace periods set for the principal depth is fixed for maximum of 3 months and the lessee’s obligation to pay unsubsidized interest occurs from the moment the leasing is provided. Furthermore, upon the request of the lease, periods of pause may be established for principal depth payments for a period of up to 6 months.
Insurance terms of the leasing object
Leasing object is insured for injury and loss risks for the entire period of the leasing contract. Insurance is carried by the expense of Credit organization.
* If the payment is not paid in schedule, a penalty is set on the expired part of the payment of up to 0.125% for each calendar day till repayment obligation,
* “WARNING: IN CASE OF NOT FULFILLING YOUR OBLIGATION OR IF THEY ARE FULFILLED
IMPROPERLY, THE INFORMATION ABOUT YOUR DEBT WILL BE SENT TO CREDIT REGISTRY AND CREDIT BUREAU (ACRA CREDIT REPORTING). ATTENTION: HAVING A BAD CREDIT HISTORY CAN LATER HINDER OTHER LOANS.”
Periods of decision-making for Lease Application
After the proper submission of required lease documents within seven days an analysis is made and if the results of the analysis meet the internal leasing regulations, the case is submitted to the competent authority for consideration. When the decision about the leasing application is made by the authority, it is immediately submitted to the customer.
Criteria for a positive decision on leasing
Leasing factors include: the reasoning of the acquisition of the leasing object, the client’s financial situation, sufficient long-term liquidity, capability of liability coverage, personal factors such as the client’s reliability and assertion of willingness to fulfill the obligations in time, abilities, experience, etc. The factors to refuse the provision of leasing are: The insufficient level of the above mentioned indicators, as well as false documents, inaccuracy of the documents, failure to submit the required documents, the negative information from credit register and / or from ACRA credit bureau, and other reasons.