Today, the International Finance Corporation (IFC), the private sector arm of the World Bank group, provided a US$2mn senior loan to Armeconombank to broaden the bank’s funding base for on-lending to SMEs and for financing residential housing projects.
By providing financing to Armeconombank (AEB), IFC will enable the bank to expand its lending operations and provide commercial financing to businesses in a variety of sectors, therefore fostering economic growth. In addition, as the first IFC investment in Armenian commercial banking sector, the project will have an important demonstration effect for other potential investors.
At the signing ceremony Edward Nassim, director of the IFC’s Central and Eastern Europe Department, commented: “We are very pleased to start our investments in the Armenian banking sector with such a reliable partner as Armeconombank. Our loan, apart from the commercial financing, will allow the bank to substantially expand its mortgages financing program, which will play an important role in raising living standards of Armenian citizens.”
Ashot Osipyan, chief executive officer of Armeconombank says, “By signing this loan agreement we will be able to offer to our corporate clients financial resources with longer maturities and substantially increase our outstanding portfolio in mortgages to individual clients. Dedicated and effective work of the teams engaged in negotiations, enabled us to reach to this agreement in a short period of time.”
Armeconombank (AEB) is one of the largest, privately controlled banks in Armenia.  It is the fourth largest bank in Armenia in terms of assets, with 24 branches across the country and 450 employees. Today, the bank focuses on serving SMEs, retail clients, and financial institutions. AEB had the net worth of about US$5.3mn and total assets of around US$33.4mn equivalent as of the end of 2003.
Armenia became an IFC member in 1995. The corporation began investing in the country in 2000. As of July 2004, IFC has invested US$9.09mn in three projects including the loan to Armeconombank. IFC continues to explore the investment opportunities in partnership with strategic investors in both the financial and real sectors of the country. In addition to the investment program, IFC has been providing advisory services on corporate governance, improvement of the investment climate and small and medium enterprise development.