The FINANCIAL -- The Asian Development Bank’s (ADB) Trade Finance Program (TFP) has approved its first-ever trade loans in Armenia under its Revolving Credit Facility (RCF). The RCF loans, which support pre-shipment and post-shipment trade transactions, were extended to three Armenian banks—Ameriabank, Ardshinbank, and ArmEconomBank.
“Working with our partner banks in Armenia to extend loans to companies, including small- and medium-sized businesses to expand their import and export activities, will help fuel growth and job creation, so we’re really pleased to play this role,” said Steven Beck, head of trade finance at ADB.
The loan to Ameriabank has been extended to support the export of Armenian cheese to one of Russia’s largest consumer retailers while the loan to Ardshinbank is supporting Armenia's sole electricity distributor to import capital equipment. The loan to ArmEconomBank has allowed a Yerevan-based company to import medium-density fiberboard from Georgia for its specialist furniture goods business, according to ADB.
Prepared foodstuffs are among Armenia’s principal exports, accounting for roughly 21% of the total, while machinery and equipment is the second-largest import category, accounting for about 14% of the total. The furniture industry was one of the few sectors that registered positive growth during Armenia’s economic slowdown in 2015.
Ameriabank and Ardshinbank are the country’s two largest banks in terms of total assets and loans, with Ameriabank’s assets now topping $1 billion—the highest ever in the country’s independent banking history. ArmEconombank was the 11th largest in 2015.
“The RCF is an important and well-established trade finance product and we are glad to activate it in Armenia,” said Nana Khurodze, ADB’s TFP relationship manager for Central Asia and the Caucasus. “RCF loans help fund trade transactions throughout a firm’s trading cycle, therefore improving its cash flow.”
Backed by ADB's AAA credit rating, the TFP provides guarantees and loans to over 200 partner banks to support trade, enabling more companies throughout Asia to engage in import and export activities. With dedicated trade finance specialists and a response time of 24 hours, the program has established itself as a key partner in the international trade community, providing fast, reliable, and responsive support to fill gaps in the region’s most challenging markets.