The European Bank for Reconstruction and Development (EBRD) is lending US$ 5 million equivalent in local currency to Converse Bank for on-lending to micro, small and medium-sized enterprises (MSMEs) in Armenia. The EBRD’s funds will help Converse Bank to expand its lending portfolio, especially in the country’s remote rural areas.
Converse Bank is one of the leading financial institutions in Armenia and has been an EBRD client since 2008. The bank offers services to all segments of the market through its wide network of branches in all regions of the country.
The loan to Converse Bank falls under two important EBRD initiatives: (i) the Armenian Multi-Bank Framework Facility II (MBFF II) which aims to support the sustainable development of the country’s banking sector with a special focus on supporting micro, small and medium-sized enterprises and (ii) the Local Currency Lending Programme in Early Transition Countries (ETC LCY), which aims to further private sector development by providing long-term financing and ensuring that Armenian borrowers, including local enterprises, banks and microfinance organisations, avoid taking on currency exchange risks.
“The local business will greatly benefit from this facility in the current economic environment where there is a limited source of local currency long-term financing. This transaction reinforces the EBRD’s commitment to support the development of private businesses in Armenia as well as to further strengthen the financial sector in the country,” said Valeriu Razlog, Head of the EBRD Resident office in Yerevan.
The EBRD has been active in Armenia since the country’s independence and to date has invested over €613 million. The Bank is focused on supporting the development of local enterprises and financial institutions and specifically seeks to promote a competitive, transparent and fair business environment in Armenia. In 2012, the EBRD signed 15 projects worth a total of €94 million in Armenia.