- * Small and middle-sized credits including 100 million AMD,
- * Large-sized credits beginning from 100 million AMD.
Nominal interest rate is 10-12%
Credits are provided to RA resident commercial legal entities and individual enterprisers, in a non-cash form.
Main spheres of financing
- * production,
- * agriculture,
- * information technologies,
- * provision of services and service.
During the process of financing the preference is given to
- * the organization of new production and its enlargement,
- * import substitution, organization of production being exported or having a potential of export,
- * to the production being organized by using new technologies or investing innovations,
- * creation of new or additional jobs, maintenance of existing jobs.
Period of redemption
- * Replenishment of working capital up to 3 years,
- * realization of capital investments up to 5 years.
Currency of credit
- * AMD
Order of credit extinction
Credits are usually redeemed through equal monthly redemptions of principal amount of credit. Development and Investments Corporation of Armenia can also give customers grace period up to 12 months (during the grace period customer makes the payment of interest rates being accrued only according to credit). The representation example of calculation of interest rates of credit is presented here: Business Loans:
Security of credit
Subject of pledge can be
- * real estate (apartment, dwelling house, house, territory, building-structure, land, etc.),
- * movables (autotrucks and motor cars, agricultural techniques, equipment, etc.),
- * state and corporative shares,
- * revolving funds (ready product, raw material, materials, etc.),
- * state and corporative shares, cash means on demand and term (AMD, USD, Euro),
- * rights subject to be alienated according to RA legislation,
- * property not prohibited by RA legislation.
The followings can’t be subject of pledge:
- * expensive and semi-expensive stones,
- * golden items, golden monetary,
- * values which are prohibited for privatization, property, as well as management, usage and alienation,
- * property being taken out of circulation,
- * property being a historical and cultural value.
Means of provision of credit obligation can also be
- * state guarantees or warrants,
- * guarantees issued by banks,credit organizations and insurance companies,
- * guarantee issued by legal entities being financially reliable,
- * contracts and other valid documents, from which the expected money flows are a basis for return of the credit,
- * guarantee issued by individuals.
Maximum index of credit/pledge value ratio
|Real estate (Yerevan city)||up to 70% including|
|Real estate (RA marzes)||up to 60% including|
|Transport means||up to 60% including|
|Equipment||up to 50 % including|
|Revolving funds||up to 50% including|
|Monetary means||up to 90% including|
|Other pledge||according to the decision of credit committee.|
A desirable variant for a credit organization is that when minimum 50 % of general credit being pledged with one credit presents a real estate.
Amounts subject to be paid to Development and Investments Corporation of Armenia for crediting
For providing each credit service either fee is taken or annual service payment of credit is stipulated.
- * Service payment on each credit can comprise up to 1 percent of the amount of credit, but not more than 2.5million AMD,
- * Annual service payment of credit as a service payment of credit for that year is paid once a year by the Customer up to January 31 of that year and is calculated taking into account the balance amount of credit on January 01 of that year.
Service payment is paid flat at the moment of providing the credit. At the moment of providing the credit Borrower pays flat the service payment of credit of that year.
Evaluation and insurance conditions of property
- * The evaluation of pledge is realized by independent evaluating organizations rendering specialized evaluation services having appropriate licensing, the services provided by them are paid by Borrowers.
- * Valuation prices starting at 10,000 AMD maximum amount of collateral depends on the size and complexity of evaluation.
- * Vehicles being offered as a pledge by Pledgee are insured to the benefit of Credit organization. In case of necessity on the basis of decision of Credit committee by Credit organization it can be demanded to make the insurance of real estate, mechanisms, equipment, different product-material values and other means being offered as a pledge to the benefit of Credit organization. The insurance realated expenses are made on account of Borrower or Pledgee.
- * Insurance premium is calculated at 0.2% to the appraised value.
- * In case of violating the terms of returning the Credit partially or wholly by Borrower the stipulated percent is cancelled and percents are paid to the Credit not returned in time on the day of providing credit at double amount of calculation rate of bank interest stipulated by Central Bank of RA, until the redemption of Credit debt.
- * In case of not paying the interests in the terms stipulated by contract, Borrower on the demand of Creditor pays penalty at amount 0.125% (zero point one hundred twenty-five) of not paid interest rates for each delayed calendar day.
- * WARNING !!! YOUR PROPERTY (house, car or other) CAN BE CONFISCATED, IF YOU DON’T MAKE THE REDEMPTIONS OF YOUR INTEREST RATES AND AMOUNT OF CREDIT IN TIME. *
- * WARNING!!! IN CASE OF NOT DOING OBLIGATIONS, OR NOT DOING IT PROPERLY THE INFORMATION ABOUT YOUR DEBTS WILL BE SENT TO THE CREDIT REGISTER AND CREDIT BUREAU (ACRA).
- ATTENTION!!! HAVING BAD CREDIT HISTORY WILL INFLUENCE ON GETTING OTHER CREDITS IN FUTURE.
- * In case the amount of money received from realizing the pledged property is not enough Development and Investments Corporation of Armenia has a right to get the money from other property and accounts of debtor for satisfying its demands.
Possible cases and conditions of early redemption of credit.
Early and full redemption of credit is realized on the basis of written notice of borrower. In separate cases by the decision of credit committee early redemption conditions of credit can be stipulated.
Terms of making a decision on credit offer and providing the credit to borrower
After properly presenting the necessary documents for crediting, the analysis is done, and in the result of analysis, in case of satisfying the demands of internal legal acts it is represented to the discussion of competent body. After making a decision on credit request it is immediately presented to the customer. The period between the days of certification and provision of the credit by competent body can’t exceed thirty calendar days.
Standards of making a positive decision on providing the credit.
Satisfactory level of current realization, revolving funds, profit margin, quantity of redemption days, service of debt, capital adequacy, pledge realization and security rate and other indexes are factors for providing credit. Factors denying the provision of credit: not satisfactory level of the mentioned indexes, as well as the fact of business description being nonrealistic, unreliability of documents, non-presentation of necessary documents, negative information from credit register, other causes.
Loans within the framework of cooperation agreement with “Armenia SME DNC” Foundation
|Period||up to 5 years|
|Security||pledge offered by the customer and guarantees provided by the fund; moreover, the loan amount guaranteed by the fund may not exceed 70% of the principal amount or 15 million drams.|
Partly subsidization of interest rates of loans granted to export-oriented organizations of manufacturing industry sector
The interest rates of the providing credit are partly subsidized on following terms.
a) Credits granted to exporter companies operating in processing industry and/or providing engineering services are subsidized:
* an amount equivalent up to five percentage points of the loan interest rate, as a result the creditor have to pay 7% interest rate during the period of subsidization,
* according to the N 30-N Decision of the Republic of Armenia made on Jan. 15, 2015 “On approval of the list of border areas, where the lands are unused as a result of military operations, all the activities are exempt from taxes” an amount equivalent up to nine points of the loan interest rate is subsidized in case of companies which run their businesses in border areas and are included in above mentioned list, as a result the creditor have to pay 2-3% interest rate during the period of subsidization.
b) At the same time, the loans given to the creditors, that run their business in above mentioned border areas and carry out production for defensive and national needs, are subsidized in an amount equivalent up to nine percentage points, as a result the creditor have to pay 2-3% interest rate during the period of subsidization.
Subsidization period of the interest rates of the credits given by the credit organization is for the first 2 years, but for the creditors, that run their business in border areas – up to 5 years.
Credits given to agro-processing sector for purchasing agricultural raw materials
|The maximal amount of money||1 bilion AMD|
|Nominal interest rate||12%|
|Subsidized interest rate||9%|
|Interest rate, that pays the creditor||3%|
|Period||Up to 1 year|
Loans within the framework of partly subsidization of the loans given to agricultural sector
|Amount||3-10 mln. AMD|
|Nominal interest rate||maximum 12%|
|Period||up to 5 years|
* subsidization will be performed in such amount, that the creditor will pay 5% as a result,
* credit interest rates’ subsidization for the business held in social support receiving border areas approved by the decision N 1444-N 18.12.2014 of the Government of Armenia and agricultural cooperatives will be performed in such amount, that the creditor will pay 3% as a result.
The participation of the European Investment Bank:
The European Investment Bank, which is the European Union’s financial organization established by Article 308 of the Act of the European Union’s Activities, together with financial institutions participates in those programs that are part of the objectives of the European Union. This program gives a financial advantage to the beneficiaries, which is expressed in the percentage of a loan. This financial advantage is at least 25 basis points annually, in comparison to the annual interest rate, which is offered by the Development and Investments Corporation of Armenia for similar loans without EIB financing.
The interest rate
The interest rate is 10%.
- * The loan amount given to the borrower can not exceed 100% of the planned cost of the project.
The main sectors of financing
- * Agriculture,
- * Processing of agricultural products,
- * Tourism.
Beneficiaries of this program are organizations that meet the following conditions:
Beneficiary enterprises that are Micro, Small and Medium autonomous entities and have less than 250 employees at the time of providing loan application to Project Management Unit of “German-Armenian Fund”, as well as independent Medium capitalization companies, whose aggregate number of employees is greater than 250 and less than 3,000 at the time of disbursement application.
On the claim of the Central Bank, Development and Investments Corporation of Armenia may assign to the Central Bank its rights towards its beneficiaries, as well as perform the necessary operations arising from the assignment of the mentioned rights (and other related rights) after receiving a written request of Project Management Unit of “German-Armenian Fund”.
“Information requests regarding Environmental & Social issues of sub-projects financed with EIB funds should be directed to the following address: 74 Nairi Zaryan St., Building 277, Yerevan, Republic of Armenia, Tel.: +37460 506556, +37410 708020, +37410 708030, +37410 708040, E-mail: email@example.com “
Loans, given in the framework of credit facility loan agreement with the Foreign Financing Projects Management Centre (FFPMC)
In the framework of the contract signed on 22 July 2013 between Development and Investments Corporation of Armenia and Foreign Financing Projects Management Center, in case of matching “MILLENIUM CHALLENGES-ARMENIA” state non-commercial organization’s “From Water to Market” program requirements, there are given loans under following conditions:
|Amount||up to 30 mln. AMD|
|Nominal interest rate||10%|
|Period||up to 5 years|
Provision of loans by financing the processes before exporting in the framework of cooperation with “Export Insurance Agency of Armenia” CJSC
Purpose of the loan
Purchase of revolving funds in order to execute export contract.
Up to 18 months
Loans are insured by “Export Insurance Agency of Armenia” CJSC.
Customer’s agreement about provision of information of his legal, economic, financial activity, as well as any other information including banking and commercial secrecy provision of information is to be represented in the framework of cooperation with “Armenia SME DNC” Fund, Development Foundation of Armenia and the European Investment Bank /See attached relevant forms/
Other additional documents, the necessity of which is decided by credit organization.