Loans for the purchase of agricultural raw materials

Provision of loans within the framework of the interest rate subsidy
program of loans for the purchase of agricultural raw materials

Beneficiaries

The loan is provided to private entrepreneurs and legal entities engaged in the processing of
agricultural raw materials.

Loan purpose

• purchase of fruits and vegetables և glass jars used in the production of canned fruits
  and vegetables, purchase of caps, aseptic bags and their containers
• purchase of grape
• purchase of milk
• purchase of farm animals by slaughterhouses
• purchase of chinchilla

Loan currency

AMD

Amount

Within the framework of the program each year can be provided:

a. up to 4 billion drams for grape procurement,

b․ up to 3 billion drams for the procurement of fruits and vegetables,

c․ up to 1 billion drams for milk procurement,

d․ to each borrower for refrigeration and export activities up to 3 billion drams for the
purchase of fruits and vegetables and grapes,

e ․ to each borrower carrying out slaughter activities for the purchase of animals, up to
2 million drams per 15 square meters of the slaughterhouse, up to 5 million
drams for a mobile slaughterhouse.

f ․ for chinchilla purchase to each chinchilla fur exporter up to 50 million drams.

At the choice of the borrower, a maximum amount of credit may be provided for one of them,
the amount of loans provided for other purposes should not exceed the amount set for that
purpose 50% of the maximum loan amount.

Raw material purchase agreements

The latter are concluded in accordance with the following model forms of contracts defined by the Program:

• for purchases for the purposes specified in paragraph “a” according to model form 4,
• for purchases for the purposes specified in paragraph “b” according to model form 5,
• for the part of the grapes referred to in paragraph “d” according to model form 4,
• for the part of the fruits and vegetables referred to in paragraph “d” according to model form 5,
• for purchases for the purpose mentioned in point “c” with N 6.

Moreover:

• the amount of the loan provided for purchases for the purposes mentioned in points “a” and “d”
  is calculated by raw material purchase contracts, which were signed before July 1 of the given year.
• the amount of the loan provided for purchases for the purposes mentioned in point “b” is
  calculated by raw material purchase contracts, which were signed before October 1 of the given year.

Interest rate as a result of state subsidy

• 2% to businesses in border areas receiving social assistance,
• 5% to businesses in other communities.

Maturity

Lending term is defined as:

• up to 3 years for grape procurement;
• up to 1.5 years for all other purposes.

Grace period

A grace period can be set for the loan (during the grace period the client only pays interest amount accrued on the loan).:

• Up to 12 months for grape procurement;
• Up to 6 months for all other purposes.

Amounts payable to the Development and Investment Corporation of Armenia for lending

The corporation does not set any other fees for services

Possible early repayment terms and conditions

There are no fines or penalties for early repayment of the loan

The subsidization of interest rate is stopped, if: 

• there are overdue liabilities to the loan for more than 60 days cumulatively in one year period (last 12 months)
  or, because of overdue liabilities to the Corporation, according to objective criteria, the loan is not classified as
  a standard under current loan classification,
• as a result of the monitoring, a violation of the terms and requirements of this program is revealed,
• in case of misuse of the loan by the borrower and the provision of false information.

You can get acquainted with the details of the program at the following link.

Useful information

• In case of necessity to change significant conditions (interest rate, commission, penalty, term, volume of liability)
  which will increase the liability of the guarantor or cause other adverse consequences, the guarantor shall be
  notified in advance (7 days before the change). the mentioned change is made in accordance with the procedure
  pre-selected by the guarantor, and in case of the latter’s consent, the mentioned change is made.
• The customer has the right to communicate by mail or e-mail.

Other lending terms are common to all types of loans that you can find at the following link.