YEREVAN, May 12. /ARKA/. The Central Bank of Armenia, together with the Ministry of Economy and partners from the World Bank, is discussing a mechanism for providing partial guarantees for small and micro businesses through a special guarantee fund. Central Bank Chairman Martin Galstyan told reporters on the sidelines of the conference “SMEs: Impact and Development Challenges.”
According to him, one of the key problems small and micro businesses face when applying for bank financing is a lack of collateral.
“Many start businesses without investing their own funds, and that’s why banks require collateral. For many companies, this becomes an insurmountable obstacle,” Galstyan said.
The Central Bank Governor noted that the partial guarantee mechanism under discussion could alleviate this problem.
“If a company doesn’t have collateral but wants to use a loan, it can become a member of this fund for a fee,” he explained.
Galstyan emphasized that the project is still only in the discussion phase.
“It’s too early to talk about launching it, as there are many nuances that need to be considered for the program to be effective. There’s no agreement in principle on any of these issues yet,” the Central Bank governor noted.
