Program loans provided to the agricultural sector (with partial or full subsidization of interest rates)

Conditions

1.Loans provided for the development of cattle breeding

Provisions

Terms

Grace period for repaying the loan

12-60 months

Loan currency

AMD

Annual nominal interest rate

12.4-14%

Annual interest rate subsidy

The amount of the subsidized interest rate is set in such an amount that the loan is to be provided to the Borrower at 0%, 2% or 3% interest rates*

Loan amount

 Minimum 3,000,000 AMD

Maximum 300,000,000 AMD

Grace period for repaying the principal amount of loan

Up to 12 months at the beginning of the initial year of the loan

2. Loans provided to agroprocessing sector for the purpose of purveyance (purchases) of agricultural material

    Provisions

Terms

Program/resource

Class of client

A

B

C

D

A, B, C, D

By own or other resources

Minimum interest rate

AMD

USD

15%

11.00%

16%

16.50%

11.00%

Maximum interest rate

17%

11.00%

Loan amount

The minimum- AMD 3,000,000

 Minimum AMD 7,500

The maximum – AMD 4,000,000,000

 Maximum USD 7,500,000

Under GAF programs

Annual nominal interest rate

13%-13.4%

Loan amount

The minimum- AMD 3,000,000

The maximum- AMD 480,000,000

Loan currency

AMD

Subsidy of annual interest rate**

AMD – 9%, 12% or 14% percentage points

USD – 5%, 7% or 8% percentage points

Loan redemption period

Minimum period 12-months

 

Maximum period

a) in case of establishing a garden, 96 months, the grace period for principal repayment is 60 months,

 b) in the case of implementing hail protection systems without garden foundation: 84 months, the grace period - up to 36 months,

c) without introducing modern irrigation systems (drip or sprinkler), as well as in the case of construction or expansion of water reservoirs: 48 months, the grace period for principal repayment - up to 12 months,

d) in case of cultivating non-traditional high quality crops – 24 months (60 months in case of asparagus), grace period for repayment of Principal up to 12 months (up to 48 months in case of asparagus)

 

3. Loans provided for the construction or renovation of small and medium smart livestock buildings  and their technical support

Provisions

Terms

Loan repayment period

16-60 months

Loan currency

AMD

Annual nominal interest rate

 

12-13.15%

Annual interest rate

The amount of the subsidized interest rate is set in such a way that the loan is to be provided to the Borrower with 0% or 2% interest rates**

Loan amount

 

Grace period of repaying the principal amount of loan

Up to 12 months

Provisions

Terms

4. Loans provided to agroprocessing sector for the purpose of purveyance (purchases) of agricultural material

    Provisions

Terms

Program/resource

Class of client

A

B

C

D

By own or other resources

Minimum interest rate

15%

15.5%

16%

16.5%

Maximum interest rate

17%

Loan amount

The minimum- AMD 3,000,000

The maximum – AMD 4,000,000,000

Under GAF programs

Annual nominal interest rate

12%-13.4%

Loan amount

The minimum- AMD 3,000,000

The maximum- AMD 480,000,000

Loan currency

AMD

Subsidy of annual interest rate

Loans are subsidized by 9 percentage points, and for economic operators operating in the areas of settlements of border communities receiving social assistance and procuring and processing agricultural raw materials in the same places, no more than 12 percentage points.

Loan redemption period

a)6-18 months

b)6-36 months for purveyance of grapes (purchases)

Loan amount per direction

a)up to AMD 4.0 bn can be provided each year for purveyancve of grape (purchases)

b) the balance of the principal amount of loans provided for the purpose of procurement (purchases) of fruits and vegetables cannot exceed AMD 3.0 bln,

c) the balance of the principal amount of loans for purveyance (purchases) of milk cannot exceed AMD 1.0 bln,

d) the balance of the principal amount of loans provided for the purpose of purveyance (purchases) of fruits and vegetables and grapes to each borrower carrying out cold storage and export activities cannot exceed AMD 3.0 bln,

, e) loans granted to each borrower carrying out slaughterhouse activity for the purpose of purchasing agricultural animals are calculated by the surface  of the slaughterhouse, not more than AMD 2.0 mln for a surface of 15 m2, and not more than AMD 5.0 mln for a mobile slaughterhouse,

f) The balance of the principal amount of loans provided for chinchilla purchases to each borrower carrying out chinchilla fur export activity cannot exceed AMD 50.0 mln

Grace period for redemption of loan principal

a) 6 months

b) 12 months for purveyance of grapes (purchases)

5. Loans granted for the purpose of development of greenhouses

    Provisions

Terms

Program/resource

Client class

A

B

C

D

By own or other resources

Minimum interest rate

15%

15.5%

16%

16.5%

Maximum interest rate

17%

Loan amount

Maximum AMD 3,000,000,000

Under GAF programs

Annual nominal interest rate

12%-13.4%

Loan amount

Maximum AMD 480,000,000

Loan currency

AMD

Annual interest rate subsidy

The loan interest rate will be subsidized by 10 percentage points, but not more than the loan interest rate provided by the financial institution.

Loan repayment period

24-96 months

Grace period for redemption of loan principal

Maximum 12 months

* 2% interest rate for the purchase of tribal cattle grown in the Republic of Armenia, 3% interest rate for the purchase of imported cattle, and to the entrepreneurs of border communities (hereinafter referred to as border communities) included in the list approved by the resolution of the Government of the Republic of Armenia N 1444 of December 18, 2014 or cooperatives operating in the field of agriculture (hereinafter referred to as the Cooperative) with a 0% interest rate,

** The loan interest subsidy will be carried out in 9 (in case of foreign currency: 5) percentage points (in case of foreign currency: 7%) percentage points for the cultivation of non-traditional high-value crops, including leguminous crops, the introduction of modern irrigation systems without garden establishment, or the construction or expansion of water reservoirs, and the businessmen of settlements of border communities receiving social assistance, agricultural cooperatives, citizens disabled as a result of combat duty or operations during the performance of military service duties, young people in agriculture (Individuals under the age of 18-35 (at the time of entering into force of the credit agreement) with 14 (in the case of foreign currency: 8) percentage points. Moreover, the percentage point of the subsidy cannot be higher than the interest rate of the provided loan.

****Citizens disabled as a result of combat duty or operations during the performance of military service duties and businessmen operating in border settlements receiving social assistance approved by the Government of the Republic of Armenia Decision No. 1444 of December 18, 2014, at 0% interest rate,

******* The minimum amount of the loans provided under 3th  clauses can be less than AMD 5,000,001 provided that the actual annual interest rate of the loans to be provided does not exceed 14%.

 

ATTENTION.  As an additional means of guaranteeing the loan, the Bank may require the guarantee(s) of other person/people.

ATTENTION. Early repayment of  the loan is  allowed, for which nopenalties or fines are applied .

ATTENTION.  Interests are calculated on the loan balance.

ATTENTION. The changes of foreign currency rates may affect loan repayments.

ATTENTION.  The basis for calculating the actual annual interest rate were the exchange rates of the US dollar (1USD = 495.59 AMD) and EUR (1 EUR = 586.68 AMD). The actual annual interest rate can be changed depending on the change in the amount of the exchange rate published on the official website of the RA CB.

ATTENTION.  When applying for a loan, the Bank provides you an individual sheet of essential terms of consumer loan, in which individual terms of the loan to be provided to you are presented.(up to AMD 5,000,000 inclusive or equivalent in case of loans provided in foreign currency )

ATTENTION.  You can get acquainted with the tariffs of additional services provided within the framework of loan operations at the following link: https://aeb.am/media/2020/04/3717.pdf

ATTENTION. In case of non-fulfillment or improper fulfillment of your obligations the lender sends your data to the credit bureau where your credit history is being formed up to 3 business days. You are entitled with the right to get your credit history from the credit bureau free of charge once a year( https://acra.am/?lang=hy )

ATTENTION. Bad credit history may prevent you from receiving other loans in the future

ATTENTION. Loan interests are calculated based on the nominal interest rate and the actual interest rate shows how much the loan will cost in case of fulfillment of loan obligations in defined terms and sizes. The actual annual interest rate calculation procedure can be found on the following link: https://www.aeb.am/media/2019/06/2640.pdf[br]

 

ATTENTION. On the purpose of due diligence of the customer envisaged by RA law on “On combating money laundering and terrorism financing”, the Bank may request additional documents or other information from the consumer based on <<Know your customer>> principle, as well as ask the consumer additional questions during oral communication. 

ATTENTION. In compliance with the agreement signed with USA, to find out whether you are a US tax payer, the bank may collect additional information about the agreements, contracts, cooperation, membership signed by financial institutions, which may have a direct impact on the consumers (e.g. Foreign Account Tax Compliance Act (FATCA)). 

ATTENTION. In case of early repayment of more than 20% of the principal amount of the loan (which does not include the repayment of the part of the loan provided for by the repayment schedule in the given month) without the written consent of the Bank during each month, a fine of 5% of that amount is calculated in case of loans exceeding the amount of AMD 5,000,000 as of the first day of the given month,

The payments to be paid by the consumer are not included in the calculation of the actual interest rate irrespective of the fact that payments against the works and services have been made with or without a credit.

ATTENTION. The nominal interest rate may be changed by the bank. The information on the changes of the nominal interest rate may be found on https://www.aeb.am/media/2019/05/2631.pdf 

1.You are eligible to communicate with financial institution by the means of communication you prefer – through postal services or electronically. The receipt of information electronically is the most convenient. It is available round-the-clock (24/7), is free of the risk of loss of paper information and ensures the confidentiality.

2. The possible negative consequences, penalties/fines for the customer in case of non-fulfillment of obligations

  • 0, 13%a of the unpaid amount for each overdue day
  • 0, 13%a of the unpaid interest amount for each overdue day

3. If you have outstanding liabilities against the creditor, while fulfilling your obligation the loan repayment arrangements are made in the following sequence:

  • Court costs (if any)
  • Collateral sale costs (if any)
  •  Accrued penalty
  •  Accrued interest
  •  Insurance costs /if any/
  •  Principal amount of the loan

4. Property (house, car, etc.) pledged by you may be confiscated by law in case you fail to perform your loan obligations on time.

5. In case of non- fulfillment of loan liabilities, the loan liabilities are covered by the collateral, and should the collateral be not enough to repay the borrower’s liabilities it is possible to repay the liabilities on the account of another property of the borrower and/or guarantor(s)/co-borrower/s/.

6. Loan interests are calculated towards the loan balance.

For example if the customer is provided with a loan in the amount of AMD 1.200.000 with an annual interests rate of 24% ,with 12 months period (while calculating monthly accrued interests as a number of days 30 days period has been taken as a basis).

Months

Loan balance

Repayment from loan

Repayment from interest

1

1.200.000

100.000

23.671

2

1.100.000

100.000

21.699

3

1.000.000

100.000

19.726

4

900.000

100.000

17.753

5

800.000

100.000

15.781

6

700.000

100.000

13.808

7

600.000

100.000

11.836

8

500.000

100.000

9.863

9

400.000

100.000

7.890

10

300.000

100.000

5.918

11

200.000

100.000

3.945

12

100.000

100.000

1.973

7. WE SHOULD REMIND THAT THE EXCHANGE RATE FLUCTUATIONS MAY HAVE AN IMPACT ON THE REPAYMENTS OF LOAN PROVIDED IN FOREIGN CURRENCY.

8. The Bank applies no limits to loan amount; it will be conditioned by and related to:

  •  Purpose of loan
  •  Customer's creditworthiness
  •  Collateral offered by the customer
  •  Loan risk assessment
  •  Requirements of prudential standards provided by the Central Bank of Armenia

9. “ARMECONOMBANK” OJSC can provide services to the customer under terms which may differ from those set forth in the Bank's overall policy taking into account any of the following conditions of the below-mentioned list:

  •  Customer account balance
  •  Customer account turnover
  •  Strategic importance of the customer for the Bank
  •  Number of employees in customer organization
  •  Total number of cards issued for customer organization
  •  Income gained from customer
  •  Volume of transfers
  •  Size of deposits with the Bank
  •  Significant borrower
  •  Social considerations (medical organizations, educational institutions, etc.)
  •  Being the head of such organization
  •  Other objective conditions

10. The borrower pays interest to the bank for using the loan amount, the interest of which is calculated on the loan balance for the calendar days of actual use of the loan based on a 365-day year. For loans under specific projects the interest calculation may be based on a 360-day year.

  •  Loans are repaid within the dates indicated in the loan agreement.
  •  The periodicity of interest payments is determined in accordance with the loan agreement or repayment schedule.
  •  If the repayment date for principal or interest rates falls on day off, the payment is made on the following working day without calculation of penalty for the days off.

11. Repayment of Loans

  •  Loans are repaid within the dates indicated in Loan Agreement
  •  Loans are repaid in the currency in which they were given
  •  In case of loans in foreign currency, exchange rate fluctuations may affect loan payments
  •  In case of exchange rate fluctuations, the exchange rate risk related to loans will be borne by the borrower

12. The Bank may terminate the Loan Agreement and request repayment of the loan amount, if

  • The borrower has failed to make any payment required under Loan Agreement
  •  The borrower has breached any confirmation made by the him/her and fails to correct such breach within 30 days following the occurrence thereof
  •  Any presentation, warranty, document, or information provided by the borrower is materially incomplete
  •  By reasonable opinion of the Bank, an essential negative change has occurred in financial state of the borrower, including court orders, outflow of assets, deterioration or termination of business, company re-organization.
  •  The borrower undergoes dissolution, or is subject to ongoing or pending bankruptcy proceedings
  •  The borrower interferes with monitoring
  • • In case of other objective reasons

13. The Bank may accept as collateral:

  •  Real estate: land, houses, buildings, apartments
  •  Fixed assets
  •  Circulating assets
  •  Motor vehicles
  •  Precious metals
  •  Treasury bills, foreign currency, stocks
  • Property to be purchased and ownership right
  • Cash

14. The appraisal value of movable and immovable real estate is based on the market value indicated in appraisal statement.

15. The loan or a part thereof, as well as the accrued interest is deemed overdue if not repaid within periods specified in the Agreement.

  • In case of non-repayment of the amounts (the loan, interests other payments) within the term(s) set by the Agreement, Borrower shall pay a penalty in the amount of 0.13% (zero point thirteen percent) of the overdue amount for each day of default. The total amount of the unpaid interests calculated in accordance with this paragraph shall not exceed the current debt balance.
  •  In case of non-repayment of the loan or a part thereof within the term(s) set by the Agreement, the Borrower is obliged to pay interests to the Bank in the amount of double of the settlement rates set by the Central Bank of Armenia. The  total amount of the unpaid interests calculated in accordance with this paragraph shall not exceed the current debt balance.
  •  Starting from the 91st day of overdue days, 21,5% annual interest rate is applied to the balance of non-overdue loan (term loan). After the full repayment of outstanding amounts, penalties and interests accrued, the interest rate set by the Loan Agreement is recovered.

16. The Bank shall not accept the following items as collateral:

  •  Non-circulating assets
  •  Separate parts of indivisible property
  • Leasing right
  •  Property owned by urban, rural, and local communities
  •  Property with ownership right

17.To satisfy the claim of CREDITOR-PLEDGEE, the pledged property may be confiscated in extrajudicial manner pursuant to paragraphs 2-4 of these Rules in case of non-fulfillment or improper fulfillment of the obligations by PLEDGER under Collateral Agreement and by BORROWER under Loan Agreement.

  2. The property confiscated in extrajudicial manner may be sold if under the Pledge Agreement PLEDGER has authorized CREDITOR-PLEDGEE to sell the pledged property upon emergence of the grounds for confiscation as stipulated in paragraph 1 of these Rules without seeking court intervention and so fully recover the claim covered by the collateral and has also agreed to transfer without seeking court intervention the ownership of the pledged property against the respective part of main liability to CREDITOR-PLEDGEE or any person designated by the latter in the manner provided by RA legislation.

3.Upon emergence of the grounds for confiscation as stipulated in paragraph 1 of these Rules, CREDITOR-PLEDGEE shall duly notify PLEDGER in writing of confiscation of the pledged property (confiscation notice). In two months following the date of delivery of confiscation notice to PLEDGER, CREDITOR-PLEDGEE shall have the right, pursuant to Article 195 of RA Civil Code, to sell the pledged property directly or through public auction pursuant to RA Law on Public Bidding.

4. PLEDGER undertakes to transfer the pledged property to CREDITOR-PLEDGEE within two months following the date of delivery of confiscation notice to PLEDGER.

  5. The duration of process of sale of pledged property may not become a ground for cessation of growth of BORROWER's liabilities to CREDITOR-PLEDGEE. Moreover, the proceeds from sale of collateral shall be utilized to fully cover CREDITOR-PLEDGEE's claims to BORROWER existing as of the date of sale of collateral and, should the claim not be covered on the account of the collateral, the outstanding amounts may be confiscated from other property of BORROWER.

    6. Confiscation of the property pledged to cover CREDITOR-PLEDGEE's claims by court order may be executed in the manner provided by RA legislation.

18. You can get acquainted with the tariffs on any service by visiting the following link: https://www.aeb.am/hy/sakagner/ :

19. You can get acquainted with the terms and conditions of remote banking services by visiting the following link: https://www.aeb.am/hy/mobile_banking/

 

[br]20. Loan history and Score grading[br]

[br]The essence of credit history[br]

[br]Credit history is a set of information on quality of fulfillment of current and closed financial liabilities of the customer, which is collected in the Credit Bureau based on the information provided by credit organizations.The information collected is systemized by the Credit Bureau and as needed (Application of a new loan, monitoring of acting loan and etc) is provided to financial institution having the appropriate authority making the request. The client's credit history is essential for the lending organization in order to assess the creditworthiness of the given client and to make a decision to grant or reject a loan.[br]

[br]To change an incorrect or incomplete credit history, the client can apply to the ACRA Credit Bureau by submitting a written application manually or electronically, find out what information is stored about him/her and what is the source of the incorrect or incomplete information.[br]

[br]To submit an application to ACRA Credit Bureau, please visit the following link: https://acra.am/?lang=hy[br]

[br]Please   follow    the    link   below    for   the    importance   and   significance   of   credit   history: https://www.abcfinance.am/lifesituations/credit-history.html[br]

[br]The nature of credit SCORE scoring[br]

[br]When granting certain types of loans, the financial organization uses a scoring system for assessing the creditworthiness of the client. The SCORE grade of the Applicant is mainly formed from various criteria of the credit history, based on which the applicant's creditworthiness is assessed using a scoring system. The score allows the financial organization to model and predict the possible behavior of the applicant during the period of the new loan, taking into account the eagerness of the applicant to repay previous and current obligations, the frequency of taking on new obligations and other criteria.[br]

[br]ARMECONOMBANK OJSC company uses the scoring system of evaluation developed and implemented by the Bank.[br]

[br]The factors affecting the SCORE grade are: credit burden, availablity of recorded income, previously overdue liabilities and etc. Each equest of credit history may have a negative impact on SCORE grade of the particular applicant and reduce it.[br]

[br]The customer's credit history and score can be improved by taking the following steps:[br]

  • • fully repay existing overdue loan obligations and exclude even one day delays in performance of obligations on current loans;[br]
  • • avoid becoming a guarantor for loans of untrustworthy persons in the future;[br]
  • • have recorded income.[br]

[br]Please follow the link below for the importance and significance of credit history: https://www.abcfinance.am/lifesituations/credit-history.html[br]

 

 

 

 

 

 

 

 

Demands
Requirements to Borrower
Resident sole entrepreneur. Resident corporate entity Resident individual
Positive decision grounds
Positive credit history (if available); Reliability of the submitted documents; Positive assessment of the client's financial position analysis Collateral and / or guaranty acceptable by the Bank.
Negative decision grounds
Negative assessment of the customer’s financial condition. Insufficient profitability of the presented project, insufficient argumentation of the loan purpose. Non-credibility of the presented documents. Insufficient liquidity of the loan security Not presenting the required documents within the predefined timeframe. Negative conclusion of the loan register. Other basic reasons which according to the Bank assessment will hamper the loan repayment.
General Information
Documents to be presented by legal entities
 
Punct Copy of State Register certificate, transcript on the executive authority is mandatory or a statement given by Unified State Register (the latter may not be required if the Bank receives the given information electronically in defined order).
Punct State Register statement on participants, replacement of the director, and amendments to charter (the information may not be required if the Bank receives the given information electronically in defined order). In case of joint stock companies, statement on shareholders from Central Depository of Armenia OJSC and State Register statement on replacement of the director, and amendments to charter (the information may not be required if the Bank receives the given information electronically in defined order).
Punct The documents listed in paragraph 2 are not required for corporate entities in case where the decision on borrowing may be made by the director.
Punct Charter (reviewed) (the document may not be required if the Bank receives the given information electronically in defined order)
Punct Authority's decision on borrowing, and pledging property (necessary if the information listed in paragraph 2 is required).
Punct Set of financial reports for the latest accounting period. If necessary, approved (sealed or stamped) by applicable tax authority (copy).
Punct Statement of settlements with State budget or statement on liabilities to State budget from the tax authority of relevant location (mandatory for loans exceeding AMD 10 mln or foreign currency equivalent thereof).
Punct List of fixed assets (if necessary).
Punct Tax code (copy); TIN.,
Punct Licenses (copy), if any.
Punct Passport (copy),
Punct Documents supporting the ownership right to the property offered as loan security.
Punct In case of collateral owned by individual, certificate of marriage (divorce, death of spouse).
Punct Bank account statement (if necessary).
Punct Statement of accounts receivable and payable (with breakdown if necessary)
Punct Statement on ban from Real Estate Cadastre Department (after lending decision)
Punct Other documents if necessary.
 
Documents to be presented by sole entrepreneurs
 
Punct Copy of State Register certificate, transcript on the executive authority is mandatory or a statement given by Unified State Register (the latter may not be required if the Bank receives the given information electronically in defined order).
Punct List of fixed assets (if necessary)
Punct Set of financial reports for the latest accounting period. If necessary, approved (sealed or stamped) by applicable tax authority (copy).
Punct Statement of settlements with State budget or statement on liabilities to State budget from the tax authority of relevant location (mandatory for loans exceeding AMD 10 mln or foreign currency equivalent thereof).
Punct Licenses (copy), if any.
Punct Passport (copy),
Punct Documents supporting the ownership right to the property offered as loan security.
Punct In case of collateral owned by individual, certificate of marriage (divorce, death of spouse).
Punct Bank account statement (if necessary).
Punct Statement of accounts receivable and payable (with breakdown if necessary)
Punct Statement on ban from Real Estate Cadastre Department (after lending decision)
Punct Other documents, if necessary
 
Documents to be presented by individuals
Punct Identity documents of the borrowers, pledgers and guarantors (copy),
Punct Documents containing the borrower and guarantor public service number (copy),
Punct  Documents proving the ownership of the assets (copy),
Punct  In case of collateral owned by individual, certificate of marriage (divorce, death of spouse),
Punct List of fixed assets (if necessary),
Punct Documents confirming the ownership of the loan collateral (copy) (the latter may not be required if the Bank receives the given information electronically in defined order),
Punct Ownership certificate, in case of real estate collateral (copy) (the latter may not be required if the Bank receives the given information electronically in defined order),
Punct After lending decision
Punct Statement on ban from Real Estate Cadastre Department (original) (the latter may not be required if the Bank receives the given information electronically in defined order).
Punct  Other documents if necessary.
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Updated: 02/12/2024 10:55