Assistance to already operating micro-businesses to be more effective than providing money to beginners: economist

The cabinet presented at its sitting today new anti-crisis program envisaging 10 million AMD interest-free loan to beginner entrepreneurs for starting business from zero.

The stakeholders of the program are people or organizations who correspond to the criteria of small and medium-sized business and are operating in Armenia’s provinces.

“If to view the efficiency of the assistance provided to newly opening businesses agreed with coronavirus in the pre-context of economic crisis, we may say that the government should have focused more on the  preservation of the already existed micro-business,” economist Karlen Khachatryan told Aysor.am, referring to the presented new anti-crisis program.

He said there are already operating companies who already acquired circle of customers, have certain income, jobs and now are facing financial issues agreed with coronavirus.

“The assistance would have been more effective than to the newly opening businesses. Each newly opened business contains a certain risk: it will either succeed or fail. In my opinion, if the government wishes to smooth economic issues appeared because of the virus it would have been more effective to first settle the issues of already functioning small and micro-businesses,” the economist said.

From the point of view of an idea, Khachatryan praised the idea of assistance to beginners by the state.

“There must be certain criteria and control. These funds are the ones paid by tax-payers and there is always a danger of spending them ineffectively. Consequently, if the government provides grant someone for doing business, it must clearly set what expectations it has and in what way it will get the sum back in case of failure,” he said.