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EBRD supports Armenia’s Inecobank
$5 million loan to provide finance for micro and small enterprises
Micro and small enterprises in Armenia will benefit from a $5 million loan the
EBRD is providing to CJSC Inecobank, a growing local bank with a strong
business focus. In addition, the EBRD will also increase Inecobank’s limit
under the Trade Finance Programme to $1 million. Technical cooperation funds
provided by USAID and the EBRD’s Early Transition Countries Multi-donor Fund
will complement the agreement and be used to strengthen lending procedures and
skills at Inecobank.
The EBRD loan will be used for on-lending to local micro and small enterprises
thus addressing a major constraint for the growth of this segment of the
economy. At present the still very small Armenian banking sector does not
deliver finance to micro and small enterprises on a large and sustainable
scale. By broadening Inecobank’s potential customer base, the loan will also
support the bank’s expansion.
Inecobank and the EBRD have been partners since 2005 when the Armenian bank
received a first $1 million loan to expand its capacity to serve micro and
small enterprises. In the same year Inecobank also joined the EBRD’s Trade
Finance Programme which supports trade to, from and within the Bank’s
countries of operations.
Michael Weinstein, head of the EBRD’s office in Armenia, said the new loan is
expected to boost the involvement of an important local bank in financing the
real economy. This will benefit the economy in general, but will also foster
growth in the banking sector. Facilitating micro and small enterprises’ access
to finance will support the development of a vibrant segment of the Armenian
economy, which serves as the country’s engine for growth.
Mher Grigorian, Inecobank’s CEO, said that he welcomed the loan from EBRD as
not only would it ensure that Inecobank could provide much needed finance to
growing businesses, but it also emphasises the EBRD’s confidence in Inecobank.
The Armenian economy has been growing strongly in recent years. GDP grew by 14
per cent in real terms in 2005, exceeding the 1989 output level for the first
time. In its recently published Transition Report the EBRD forecasts another
strong performance in 2006 with an estimated growth rate of 8.5 per cent.
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