EFSE and ARARATBANK invest in local business growth in Armenia
Luxembourg and Yerevan, 10 October 2019 – The European Fund for Southeast Europe (EFSE) has once again teamed up with long-time partner ARARATBANK to drive local business growth in Armenia. By providing a multi-currency senior loan equivalent to USD 10 million, the fund is supporting the bank in offering tailored financial products that meet the needs of micro and small enterprises, thereby strengthening the development of this important sector while securing and creating jobs in the country. The contract was signed today, October 10, in the capital of Moldova, Chișinău at the conference on "The Power of National Currency Financing", where the Chairman of the Executive Board of ARARATBANK OJSC Ashot Osipyan also made a speech touching upon the importance and impact of financing in local currency.
ARARATBANK has been a key EFSE partner in Armenia since 2010. The bank’s solid positioning, extensive branch network, and strategic focus on the small business market have enabled ARARATBANK and EFSE to generate more than EUR 58 million in financing for micro and small enterprises so far. The new investment will continue this momentum: Comprised of both a USD portion and a local currency facility, the loan will contribute to the bank’s ability to flexibly cater to the specific financing needs of entrepreneurs, eliminating direct exposure to currency risk for these unhedged businesses.
EFSE Board Chairman Christoph Tiskens said: “Partners like ARARATBANK are essential to helping EFSE pursue its mission of expanding access to sustainable finance for local businesses. By facilitating loans in local currency, we are, together, investing in the stability and secure growth of small businesses, which are one of the main drivers of the country’s economy.”
"It should be noted that during the nine years of cooperation ARARATBANK financed over 1,500 business projects in different sectors, creating an added value for borrowers as well as for the Armenian economy," said Ashot Osipyan, Chairman of the Executive Board of ARARATBANK. According to him, signing a new contract in local currency will keep the beneficiaries of the project away from foreign exchange risks, which in its turn will boost the profitability and competitiveness of the companies in the local market. "I am glad about the signing of this contract, which reaffirms the mutual trust and continued cooperation between our institutions," said A. Osipyan.
An impact investment fund established in 2005, the European Fund for Southeast Europe (EFSE) aims to foster economic development and prosperity in Southeast Europe and the Eastern Neighbourhood Region by investing in the success of micro and small enterprises as well as improved living conditions for private households. As access to financial services is key to developing this segment, EFSE focuses on helping local financial sectors strengthen their ability to provide responsible financing for this target group. Alongside its investment activities through local partners, EFSE multiplies its impact through the EFSE Development Facility, which provides technical assistance, training, and other nonfinancial support to entrepreneurs and institutions.
EFSE was initiated by KfW Development Bank with the financial support of the German Federal Ministry for Economic Cooperation and Development (BMZ) and the European Commission. As the first public-private partnership of its kind, EFSE draws its capital from donor agencies, international financial institutions, and private institutional investors.
Finance in Motion GmbH, Germany, serves as EFSE’s advisor and Hauck & Aufhäuser Fund Services S.A., Luxembourg, acts as manager.
For more information on the European Fund for Southeast Europe, please visit: www.efse.lu
For more information on Finance in Motion, please visit: www.finance-in-motion.com