EBRD extends credit to VTB-Armenia Bank

European Bank for Reconstruction and Development provides «VTB-Armenia Bank» CJSC with 10 million USD credit by three tranches so that the latter can extend credits to micro and small businesses (MSB) all over the country, reports VTB-Armenia bank.

The programme will give possibility to solvent Armenian MSB to use reliable, medium-term financing sources. The programme is implemented in the frames of Armenia Multi-Bank Framework Facility II. Credit will be accompanied by technical assistance in the frames of microcrediting programme of Armenia (the programme is a technical cooperation programme for development and consolidation of institutions worked out for promotion of MSB crediting activity by partner banks). Technical cooperation means have been provided for countries at early transition stage by Multidonor Fund and special Shareholders' Fund of EBRD. 

VTB-Armenia bank is fourth by the number of its actives and makes significant part of Armenian bank system; the chain of its subsidiaries is largest in the country. It is expected that the bank with its 78 subsidiaries and new services for low-income groups will have its investment in the development of MSB sector, including rural regions.

«Micro and small businesses are pillar for developing economy. There is a considerable financing deficiency in the country», said Chikako Kuno, the head of EBRD Small Business group. «This programme has special significance in the conditions of present world cash position limitations and through wide territorial representation of VTB-Armenia bank we would like to broaden financial accessibility for MSB of rural regions of the country», added Kuno.

EBRD has undertaken to promote the development of MSB sector in the countries of his activity. EBRD Small Business group carries out MSB financing long-term programmes in 15 countries and has gained perceptible experience in promoting MSB crediting programmes. One of the prior activities of the Bank is promotion of MSB in Armenia and in the region where it evolves its activity.

Having invested 202 million Euros in all the sectors of economy by 52 programmes, EBRD is the most major investor in Armenia. Programmes carried out in Armenia are part of the initiative of countries at an early transition stage. It was launched in April, 2004 and applies effectively organized financing approach to attract more investments and encourage economic reforms. 

EBRD, which belongs to 61 countries and two intergovernmental institutions, aims at contributing to transition from centrally planned economy to market economy in Central and Eastern Europe and Central Asia.