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Ardshinbank 4 - SME Financing

Armenia | Financial Institutions

Identification Code:: OP/18/0044
Total Operation Cost:: 15.000.000 USD
Maturity:: 60 months
Operation Status:: BSTDB Approved Amount – Approval Date

15.000.000 USD – 21 Sep 2018
: BSTDB Signed Amount – Signed Date

15.000.000 USD – 19 Oct 2018
: Status:
Completed
Description and Purpose of the Operation:: Loan for SME Financing of USD 15 million. The proceeds of the Loan shall be used by the Borrower exclusively for the purpose of financing SME loans in accordance with the eligibility criteria agreed with the bank. The Loan aims to contribute towards expanding the SME lending program of one of the leading Armenian banks and to better serve the rapidly growing SME financing needs of Armenian entrepreneurs.
Countries of Operation:: Armenia (100,00%)
Financial Product:: SME's
Sector:: Financial Institutions
Domain:: Private
Borrower/Client:: Ardshinbank, Armenia is a bank with many years history of operation, specialized in financing of various economic sectors. Having the second largest branch network in Armenia, the bank offers to its corporate customers a wide range of financial services: trade finance products, loans, deposits, account services, payment settlement services, foreign exchange and stock exchange operations. The bank is a key settlement bank for servicing large corporates including public utilities and telecom monopolies.
Co-Financers/Participants:: N/A
Guarantors/Sponsors:: N/A
Developmental and Regional Cooperation Impact:: The proceeds of the Loan shall be used by the Borrower exclusively for the purpose of providing loans to eligible SMEs. The Loan will facilitate: 1) Access of SMEs to Medium-term funding for their capital expenditures and working capital needs; 2) Development of the country economy through job creation, income generation, improved company infrastructure. It will also increase trade turnover among BSEC countries. 3) Institutional development of ASHIB, resulting in further business growth, stronger balance sheet, improved liquidity and profitability; The facility will have a modest but positive impact upon regional cooperation, as certain other BSEC countries such as Georgia, Russia and Ukraine are important export destinations for Armenia, It is a fair guess that at least some of the proceeds of the loan will contribute to greater intra-regional trade.
Environmental Classification and Impact:: The Borrower is an existing Client of the Bank and the gained experience in terms of its environmental and social performance has been positive. The Borrower has developed and implemented an appropriate environmental and social risk management system which is well-functioning and it is integrated in its overall risk management system. The Client’s portfolio is diverse and includes both high environmental and social risk operations such as mining and energy, and medium risk operations such as construction and agribusiness. High risk activities undergo basic environmental and social assessment, including legal compliance review, site visits and monitoring. There is no financing extended to businesses stipulated in the BSTDB’s Environmental and Social Exclusion List. For the purpose of this operation no further environmental and social assessment is deemed necessary. The Loan Agreement will include environmental and social terms and conditions requiring the Borrower to remain compliant at all times with environmental, labor, and health and safety legal requirements in effect in the Republic of Armenia; continue to carry out environmental and social assessment of sub-loan of high risks and impacts; observe the BSTDB Environmental and Social Exclusion List; and submit to the Bank annual environmental and social performance reports.
Operation Leader:: Financial Institutions II
E-mail:: fi2@bstdb.org