The European Bank for Reconstruction and Development (EBRD), a London-based development finance institution, announced recently that it will lend USD 3 million to Araratbank, an Armenian bank that provides services primarily to micro-, small and medium-sized enterprises (MSMEs), as part of a USD 12 million financial package [1]. USD 9 million of the package will be provided by three international banks: Open-Joint Stock Company Promsvyazbank of Russia, VDK Spaarbank nv of Belgium and Byblos Bank SAL of Lebanon. The loan is part of the EBRD’s Armenian Multi-Bank Framework Facility, a programme that provides equity and debt financing to financial institutions focused on supporting MSMEs.
According to Araratbank’s annual report, the bank had total assets of AMD 43.5 billion (USD 115 million) and a gross loan portfolio of AMD 16.1 billion (USD 42.8 million) as of 2009. EBRD owns a 25-percent stake in the bank.
By Nisha Koul, Research Associate
About European Bank for Reconstruction and Development: The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and more recently in Southern and Eastern Mediterranean region. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2010, EBRD invested in 386 projects with a total value of EUR 22 billion.
About Araratbank: Araratbank, previously called Haykap Bank, was founded in 1991 in Armenia and provides services to primarily to micro-, small and medium-sized enterprises (MSMEs). The European Bank for Reconstruction and Development (EBRD) has a 25-percent stake in the bank plus one share. According to Araratbank’s annual report, as of December 31, 2009, it had total assets of AMD 43.5 billion (USD 115 million) and a gross loan portfolio of AMD 16.1 billion (USD 42.8 million).
Sources and Additional Resources:
[1] EBRD News Stories, “New partners for EBRD financing in Armenia,” http://www.ebrd.com/pages/news/press/2011/111014b.shtml
MicroCapital.org story, May 18, 2010, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Participates in $2.6m Capital Increase in Armenian Bank ARARATBANK Serving Micro-, Small and Medium-sized Enterprises,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-participates-in-26m-capital-increase-in-armenian-bank-araratbank-serving-micro-small-and-medium-sized-enterprises/
MicroCapital.org story, July 4, 2011, “MICROCAPITAL BRIEF: European Fund for Southeast Europe (EFSE), Araratbank Sign $10m Loan Agreement for Micro and Small Enterprises (MSEs) in Armenia,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-araratbank-sign-10m-loan-agreement-for-micro-and-small-enterprises-mses-in-armenia/
MicroCapital Universe Profile: European Bank for Reconstruction and Development, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
MicroCapital Universe Profile: Araratbank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ARARATBANK
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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