Yervan, April 2, Noyan Tapan: The WB program of access to finance for small-to-medium businesses of Armenia was launched on March 31. This is the first time Armenia receives credits from the WB not through the channels of International Development Bank (intended for the least developed countries), but through the International Financial Corporation. The credit worth 50 million USD is provided for 26.5 years and with 5 years of grace period on a guarantee of the ministry of finance. The credit agreement between the Central Bank of RA and the WB has already been ratified by the National Assembly of Armenia. Presenting the program to journalists and all interested parties, Michael Edwards, WB coordinator of the financial and private sector programs for Europe and Central Asia mentioned, that the program was developed in very short period of time, 3 month, which reflects the effective work of both Armenia's and WB's teams. The program should be implemented by the German-Armenian Fund Program Implementation Office. According to Gevorg Tumanian, president of the Fund, Armenia's banks will initially provide loans to SME (their annual turnover should not extend 500 million AMD), subsequently the Fund can re-finance the banks, if provided loans meet WB standards: Interest rates of the Fund are calculated as arithmetic mean (with a slight margin) of CB's refinancing interest rate (now 7.75 per cent) and rates of government five-year bonds (currently around 7.2 per cent). Loans can be provided either in AMD or in foreign currency. The Central Bank has selected on a competitive basis eight banks in Armenia, which have obtained the right to become partners of this program. According to Vache Gabrielian, member of the Board of CB, loans of the WB are not aimed at influencing interest rates of any country and banks are free to provide loans with interest rates applied in the country at the moment, taking into account existing risks. He told, according to CB's recent estimations, inflation pressure would be consistent within coming months, so refinancing interest rate can be reduced only after surpassing the pressure. Currently, interest rates of the Armenia's banks surpass 15 per cent annually.

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