Signature(s)
Summary sheet
- Credit lines - Credit lines
The operation consists in a partial portfolio guarantee to Armswissbank in Armenia under the EU4Business Guarantee Facility.
The aim is to enable Armswissbank to improve lending terms and conditions and thus provide wider access to finance for micro, small- and mediums-sized enterprises in the country.
The proposed partial portfolio guarantee to Armswissbank is intended to improve access to finance for micro, small and medium enterprises (MSMEs) in Armenia.
Firms in Armenia consider access to finance to be one of the most significant obstacles to doing business. This market failure emanates from high interest rates, difficulties to assess credit risks, and foreign currency risk in a highly dollarized economy. Inclusive investments face additional constraints, including low level of awareness by clients and banks and scarcity of long-term funding.
The operation will tackle challenges by providing guarantee to Armswissbank in order to enhance lending to MSMEs at attractive terms and conditions. Clients will benefit through loans that include a transfer of financial benefits to incentivise investments.
The operation would help Armswissbank to increase its risk absorption capacity and support the implementation of projects that would otherwise be declined. The bank's proven implementation capacity and experience, strong product palette and very good financial standing make Armswissbank an effective intermediary for the partial portfolio guarantee, and key actor for increasing access to finance and promoting inclusive investments for local MSMEs.
The operation will contribute to several SDGs.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
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