The European Investment Bank (EIB) is lending €50 million to the Central Bank of Armenia to finance projects implemented by small and medium-sized enterprises (SMEs) and mid-caps in the country, particularly in the areas of agri-food processing and tourism. The loan is being provided in the context of the EU4Business initiative targeted at smaller businesses in the Eastern Partnership countries.
The Central Bank of Armenia will channel the EIB funds to beneficiaries (mainly SMEs) through a range of eligible financial intermediaries, like local banks and funds. This loan will target the agri-processing and rural sectors in particular. Approximately 25 enterprises will benefit from this loan and 2,060 jobs are expected to be sustained. These areas play a strategic role in terms of the development of Armenia, where some 95% of communities are rural and agriculture accounts for approximately three quarters of total employment in rural areas of the country.
Announcing the loan, EIB Vice-President Vazil Hudák commented: “We are further developing our cooperation with the Central Bank of Armenia, our well-established financing partner institution, for the benefit of smaller businesses that create some 40% of job opportunities and contribute the same share to the generation of GDP in Armenia. This is important for strengthening the middle class, so contributing to the political stability and diversification of Armenia’s economy.”
Chairman of the Central Bank of Armenia Arthur Javadyan added: “The European Investment Bank is a long-standing, reliable partner for SME-targeted financing programmes in Armenia. EIB-financed programmes play an important role to increase the availability and affordability of financing for SMEs and mid-caps. They also support the green financing culture among Armenian financial institutions.”
This operation is a continuation of the successful cooperation of the EU bank with the CBA. Two previous EIB loans signed in 2014 and 2016 have been fully disbursed and allocated to projects promoted by Armenian SMEs and mid-caps, improving access to long-term finance provided on favourable terms.
The European Investment Bank (EIB) is the European Union's bank. As the world’s largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects that contribute to furthering EU policy objectives.
In Armenia, EU4Business is supporting 12 ongoing projects to the tune of over EUR 30m in total. These projects provide improved access to finance and new markets, training, coaching and advisory services for small and medium-sized enterprises (SMEs) and innovative start-ups, technology-based enterprise and cluster development, targeted support for women in business, regional development, social entrepreneurship and improvement of the business environment.