The European Bank for Reconstruction and Development (EBRD) is providing a US$5mn credit line and a US$3mn trade finance facility to Armenia’s ArmSwissBank.

The EBRD financing will diversify ArmSwissBank’s funding base and support its strategy to develop its SME lending activities.

The proceeds of the EBRD credit line will be on-lent to small and medium entrepreneurs in Armenia.

The trade finance facility forms part of the development bank’s trade facilitation programme (TFP). This will allow ArmSwissBank to enhance the support provided to local import-export-oriented companies by guaranteeing their international trade finance and factoring obligations and providing pre-export and post-export financing, as well as financing of working capital needed to conclude foreign trade contracts, and other facilities.

The EBRD loan is part of the bank’s Armenia multi-bank framework facility II, aimed at supporting the increase of financial intermediation in Armenia through medium-term credit lines to local commercial banks for on-lending to commercial customers. Since the facility was launched in 2006, over US$110mn has been disbursed to 11 banks operating in Armenia.

The EBRD’s trade facilitation programme involves over 120 issuing banks in 20 of the EBRD’s countries of operation, including seven in Armenia, as well as around 720 confirming banks around the world.