Financing Agricultural Sector of Armenia

Micro Loans

Loan Currency AMD
Creditor
  • Individuals, 
  • Private Entrepreneures,
  • Legal entities 
involved in eligible activities2
Minimum and maximum limits of loan amount 200,000 - 2,000,000 AMD
Minimum and maximum terms of credit by the purpose of the loan

Operating expenditures2 and capital investment1 for business purposes in eligible activities

Credit terms Operating expenditures 8-24 months
Capital investments 24-36 months
Loan principal grace period Operating expenditures 3-9months,within the whole loan maturity, not necessarily distributed consequently
Capital investments 3-18 months,within the whole loan maturity, not necessarily distributed consequently
Mixed (Capital investments +Operating expenditures) 3-18 months,within the whole loan maturity, not necessarily distributed consequently
Grace period is applied within the whole loan maturity, not necessarily distributed consequently
Annual interest rate* Operating expenditures 13,5%
Capital investments 12,5%
Mixed (Capital investments +Operating expenditures)

                                13%

Loan disbursement method Cash, non cash/single payment
Loan interest calculation method  Declining, on the outstanding  loan balance
Repayment form
Annuity, differential or prrivate payments
Collateral
  1.  Guaranteed by at least 3 individuals or private entrepreneurs, who do not have any current overdue loans.
  2. At least 2 of the guarantees should either be owners of a real estate or should have a registered salary.
  3. The sum of guarantors' overdue days during the last year should not exceed 30 days.       
  4. The Credit Committee may also require/ask other collateral than mentioned above. 

 Guarantors mustn't have overdue liabilities at the moment of credit apllication exemination.
Age of the creditor and guratanor   18-65 years old
Minimum requirements for application consideration
  1. The borrower should not have any overdue loans.
  2. The sum of borrower's overdue liability days during the last 12 months should not exceed 30 days.
  3. The borrower should be an owner of a real estate.
Loan aplication approving body
  1. 200,000 - 1,000,000: Small (limited) Committee  (Small (limited) Committee according to the regulation of Credit Committee   )       
  2. 1,000,001 - 2,000,000: Expanded Committee  ( Expanded Committee according to the regulation of Credit Committee)                                                                                                                         

Medium Loans

Loan Currency AMD 
Borrower
  • Individuals, 
  • Private Entrepreneures,
  • Legal entities 
Loan is provided to the entities involved in eligible activities
Minimum and maximum limits of loan amount Operating expenditures 1,000,000-33,000,000 AMD
Capital investments 1,000,000-75,000,000 AMD
Minimum and maximum terms of credit by the purpose and amount of the loan Operating expenditures 1,000,000-4,999,999 AMD 8-24 months
5,000,000-33,000,000 AMD 8-36 months
Capital investments 24-60 months
Mixed (Capital investments +Operating expenditures) 24-60 months
Loan principal grace period

Operating expenditures

 

1,000,000-4,999,999 AMD 3-9 months within the whole loan maturity, not necessarily distributed consequently
5,000,000-33,000,000 AMD 3-11 months within the whole loan maturity, not necessarily distributed consequently

Mixed (Capital investments +Operating expenditures)

within the whole loan maturity, not necessarily distributed consequently 3-11 months 

Capital investments  within the whole loan maturity, not necessarily distributed consequently 3-11 months
Annual interest rate* Operating expenditures                        13,5%
Capital investments                        12,5%
Mixed (Capital investments +Operating expenditures)                         13%
Loan purpose Operating expenditures2 and capital investment1 for business purposes in eligible activities
Collateral
  1. Real estate and/or vehicles, agricultural machinery, 
  2. The Credit Committee may also require/ask other collateral than mentioned above. 
"Loan to Collateral value" maximum ratio (%) Maximum 60% of the  property's liquidation value
Collateral evaluation

The  Collateral is being evaluated  by  the organization employee.

Evaluation is free.

Loan interest calculation method   Declining, on the outstanding  loan balance
Age of borrower and guarantor 18-65 years old  
Loan disbursement method Cash**, non cash/single payment
Loan payment method Annuity,  differential or private payments 
Minimum requirements for application consideration
  1. The borrower should not have any overdue loans.
  2. The sum of borrower's overdue liability days during the last 12 months should not exceed 30 days.     
Approval period  3 - 10 days***
Loan aplication approving body Expanded Committee
Branches 
Overdue interest penalty  daily 0.2%
Overdue loan penalty   daily 0.1%
Penalty Penalty in case of non target use of loan amount
  • for loans up to 6 mln AMD- 100,000 AMD, 
  • for loans from 6mln AMD to 33 mln AMD- 250,000 AMD, 
  • for loans  33 mln AMD and more -350,000 AMD
for 5 continual overdue days  1% on the outstanding loan amount but not more than 50,000 AMD 

*The loans are subject to refinancing by the Program Management Unit of “German-Armenian Fund”.   If the loan is not  refinanced by the “German-Armenian Fund” the interest rate can be increased to   24%.                                                                          

**In the case of cash disbursement, 0.1% loan disbursement fee is charged on the disbursed              amount, if the loan amount exceeds 25 mln AMD. 

***The mentioned time period can be changed depending on the features of the activity.

1Funding objectives  
Capital expenditures (for Investment Sub-loans) 1.Purchase (including transportation and installation), upgrade, capital renovation or long-term lease of productive assets, such as land, buildings, cattle sheds, machinery (including motorized), equipment, vehicles, and tools applied in the main business activity,
2. Purchase (including transportation or planting) or long-term lease of biological assets, including fruit trees and vines, cattle and flocks used for reproduction rather than immediate slaughter or reselling
3. Purchase of any other items indicated in Chapters 11-12 (Non-current assets) of the Chart of Accounts for Organizations  (Government Decree 353-N of 17.04.2012) which are tightly related to the main business activity of Beneficiary
Operating expenditures (for Working capital Sub-loans) 1. Purchase of inventory and supplies to be used in the main business activity, including seeds, plants, fuel, pesticides, 
2. Rent of production means to be used in the main business activity, including premises, machinery, equipment, tools and other means,
3. Purchase of services for pre-, post- and support activities, including fertilization, spraying, cleaning, trimming, grading, disinfecting, waxing, sun-drying veterinary, vaccination, artificial insemination, shearing etc.
4. Financing of labor costs related to the main business activity
5. Purchase of any other items indicated in Chapter 71 (Operating expenses) of the Chart of Accounts for Organizations  (Government Decree 353-N of 17.04.2012) which are tightly related to the main business activity of Beneficiary
2List of eligible activities 
  • Crop growing (including perennial, non-perennial crops and horticulture)
  • Seed and plant propagation
  • Pre-harvest crop activities (fertilization, spraying etc.)
  • Post-harvest crop activities (cleaning, trimming, grading, disinfecting, waxing, sun-drying etc.) 
  • Animal raising (cattle, sheep, pigs, chicken, and others)
  • Support activities for animal raising (veterinary, vaccination, artificial insemination, shearing etc.)
  • Fishing and aquaculture
  • Processing and preserving of meat (from local inputs)
  • Processing and preserving of fish, crustaceans and mollusks (from local inputs)
  • Processing and preserving of fruit and vegetables (from local inputs)
  • Manufacture of vegetable and animal oils and fats (from local inputs)
  • Manufacture of dairy products, including cheese and ice-cream (from local inputs)
  • Manufacture of grain mill products, starches and starch products (from local inputs)
  • Manufacture of prepared animal feeds (primarily from local inputs)
  • Manufacture of pesticides, herbicides and insecticides 
  • Manufacture of soil fertilizers
  • Trading and leasing of agricultural machinery (e.g. tractor, combine etc.) and agricultural capital investments (e.g. irrigation system)
  • Trading of spare parts of agricultural machinery and agricultural capital investments
  • Repairing of agricultural machinery and  agricultural capital investments
  • Construction of agricultural related buildings and storage, including technical equipment of the buildings
3Eligible types of collateral
Real Estate  
Administrative areas of Yerevan (with the exception of Sari Tagh, Kond, Ayratsia and areas considered as priorities/ public interest), the territories nearby Yerevan (Yerevan-Abovyan, Yerevan- Ashtarak), Abovyan, Hrazdan, Tsaghkadzor, Ashtarak (Mughni, Karpi, Parpi, Ohanavan), Ararat, Echmiadzin, Armavir, Artashat, Dilijan, Gyumri, Vanadzor, Goris, Kapan .
Vehicles  Vehicle, the manufacture date of which mustn’t be earlier than 
  • For Russian and Chinese manufactured vehicles:  5 years, 
  • For other manufactured vehicles:15 years.   
  •                                       
If the car stays in the possession of the pledger, it is subject to mandatory insurance (CASCO) (physical damage and abduction). The beneficiary of the insurance contract is the UCO
Agricultural machinery   Combines, tractors, trucks, excavators and other equipment. The eligibility is determined by the Organization․