EBRD provides $10 million loan to ArmSwissBan to support  competitiveness and green transition of MSMEs

ArmInfo. The European Bank for Reconstruction and Development (EBRD) is providing a US$ 10 million  financial package to ArmSwissBank in Armenia to finance the private  sector's investments in growth, competitiveness, and greener and more  sustainable practices, the Bank's press service reports.

ArmSwissBank will receive US $5 million under the EU4Business-EBRD  Credit Line, to be on-lent to local micro, small and medium-sized  entities (MSMEs) with the potential to increase exports through  investments in production upgrades and new greener equipment.  

This programme, a flagship initiative of the EBRD and the European Union  (EU), helps local companies increase their competitiveness at home  and abroad by upgrading their production facilities and processes to  EU standards. At least 70 per cent of the loans will go to support  the green transition. Borrowers will receive incentive grants and  technical advice funded by the European Union under its EU4Business  initiative. This is the ninth project signed in Armenia under this  programme, opening the door for more local businesses to benefit from  the funding in the future.  

The remaining US$ 5 million will further boost access to finance for local MSMEs, the primary source of  employment in the private sector and a significant contributor to  Armenia's economy.  ArmSwissBank will broaden its reach, including  beyond the capital city, in order to offer longer- term finance and  attract new clients. The European Union is backing the loan for local  firms under its European Fund for Sustainable Development Plus  (EFSD+) guarantee scheme.  The EFSD+ financial inclusion programme is  designed to empower MSMEs, fostering their competitiveness and  growth. By offering strong financial tools and expertise, the  programme aims to encourage intermediaries to direct new lending to  those businesses that need it the most.  The financial package was  signed by EBRD Managing Director for Financial Institutions, Francis  Malige, and ArmSwissBank's Chair of the Management Board and  Executive Director, Gevorg Machanyan, at the EBRD's 2024 Annual  Meeting and Business Forum in Yerevan. The EU was represented by  Diana Jablonska, Head of Unit for Georgia, Moldova and the Economic  Investment Plan at the Directorate-General for Neighbourhood and  Enlargement Negotiations, who witnessed the signing.  ArmSwissBank is  a longstanding partner of the EBRD. It operates in the corporate and  investment banking sectors, offering traditional and innovative  financial products.  

The EBRD is the leading institutional investor in Armenia. Since it started operations there in 1992, the Bank has  invested more than ?2.1 billion in 211 projects in the country's  financial, corporate, infrastructure and energy sectors. Of those  investments, 92 per cent have been made in the private sector, the  source notes.  

According to the Financial Rating of Armenian Banks as  of December 31, 2024, prepared by ArmInfo,  ArmSwissBank increased its loan portfolio to SMEs by 39.2% over the year - to 92.7 billion drams ($229.1 million). In the Bank's total loan portfolio, these loans  account for over 50%. In total, more than 79% of ArmSwissBank's loan  portfolio are corporate loans, the volume of which increased by 35%  in 2023 - to 147 billion drams or $363 million. Moreover, about 41%  of ArmSwissBank's corporate loans fall on the industrial sector (3rd  place in volume) and about 20% for the construction sector. High  corporate lending activity allowed ArmSwissBank to increase its loan  portfolio by 50% in 2023 - up to 185 billion drams or $487 million.