YEREVAN, April 6. / ARKA /. Ashot Osipyan, the chairman of the Union of Armenian Banks, said today the agriculture is one of the most risky sectors with specific risky factors which are impossible to evaluate, for example, climate-caused risks and this is a reason raising the cost of agricultural loans.
Speaking at a news conference he cited other reasons making agricultural loans too risky, naming, particularly, absence of infrastructure. He said it is actually impossible to have agricultural machinery secured as collateral, the cattle is not registered and there are also liquidity problems. But despite these constraints lending to agriculture rose by 19% last year.
‘Today virtually all commercial banks offer loans to farmers and five or six banks have their focus on agro lending . If the problems we have mentioned above are resolved, agriculture will become more attractive to banks,’ he said.
According to experts, as of late January the volume of outstanding loans extended to agriculture stood at 51 billion Drams, making only 6% in their overall portfolio of loans. Under a government decisions, farmers in some regions of the country are entitled to soft loans with 14% interest rate, 4% of it will be subsidized by the government. The government has earmarked 300 million Drams to that end. The loans will be provided in Armenia’s national currency, the dram. In 2010 loans were extended to farmers at 24% interest rate. ($1-371.12 Drams). -0-
