Ararat Bank MSME facility



Project number:


Business sector:

Financial institutions

Notice type:


Environmental category:


Approval date:

29 May 2012



PSD disclosed:

14 Mar 2012

Translated version of this PSD: Armenia

Project Description

The EBRD is considering a credit line to Armenia's Araratbank of USS 7 million equivalent for micro, small and medium-sized enterprises, (MSMEs), with at least US$ 1 million allocated for loans to small and medium agribusinesses. The credit line will be provided either in US dollars or Armenian drams depending on Ararat Bank’s needs. The local currency lending will be supported by risk sharing early transition country (ETC) local currency programme.

Transition Impact

Through the MSME facility, EBRD will add to the overall lending capability of the banking sector in Armenia. Transition impact will be achieved through enhancement of medium-term funding available for local MSMEs as well as through the support of competition in the banking sector. Availability of funds for MSME loans will support the development of the lending market for micro, small and medium businesses and entrepreneurs and contribute to maintain employment which may have suffered following the financial crisis. The option to extend this facility in local currency can benefit Armenia's regions: it will allow to increase lending outside the capital through Araratbank’s large branch network and to start lending to the agricultural sector (a new segment for the bank).

The Client

Open Joint Stock Company Araratbank, a privately owned commercial bank operating in Armenia. The bank provides a wide range of banking services to corporate, MSME and retail customers. Ararat Bank is focussed on micro, small and medium-sized companies as its main clientele, with individuals being the second largest client group.

EBRD Finance

US$ 7 million equivalent MSME credit line, with at least US$ 1 million allocated for MSE agri-loans.

Project Cost

US$ 7 million equivalent either in Armenian dram or US dollars.

Environmental Impact

Categorised FI. Araratbank has adopted and is implementing environmental and social due diligence and monitoring procedures, and complies with the EBRD's Environmental Social and Exclusion and Referral List. Araratbank's policies and procedures are generally compliant with the requirements of EBRD's Performance Requirement 2 and 9. Some recommendations for additional improvement have been formalised in an action plan and agreed with Araratbank.

Technical Cooperation

Previous technical assistance included Institutional Building Programme which linked the Bank’s equity investment in the institution. The technical cooperation was designed to assist the bank in developing its policies and procedures, strategic planning, review of IT and recommendations on improvements, assistance in design of the marketing strategy among other objectives. Donor funding was provided by the EBRD Early Transition Countries (ETC) Fund and the EBRD’s Shareholder Special Fund (SSF).

In addition, technical assistance was provided to Araratbank under the Armenia Micro-lending Programme. The assistance was designed to expand the programme’s institution-building to ensure increased lending to MSMEs and improved skills and knowledge within the banking sector. Donor funding was provided by USAID, the EBRD Early Transition Countries (ETC) Fund and the EBRD’s Shareholder Special Fund (SSF).

It is planned that the new facility will be accompanied by technical assistance tailored to develop agri-lending in the bank. This is intended to foster sustainable agricultural and rural lending coupled with capacity building. The expected source of donor funding is the European Union Neighbourhood Investment Facility (NIF) through the institution building component of the Institution Building and Targeted Crisis Response TC Framework.

Company Contact

Mr Davit Harutyunyan, Deputy CEO,
Araratbank OJSC,
19 Pushkin street,
Republic of Armenia

Telephone: +374 10 547962
Fax: +374 10 547894


Business opportunities

For business opportunities or procurement, contact the client company.

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General enquiries

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Public Information Policy (PIP)

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Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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