Rural loan repayment deadline in Armenia should be extended, rates reduced – expert
YEREVAN, June 27. /ARKA/. The repayment deadline for rural loans should be extended and the rates should be reduced in Armenia, head of Consumer Consulting Center non-governmental organization Karen Chilingaryan said.
Under the government decree of April 1, 2011, soft rural loans are provided to Armenian farmers, at an annual rate of 14%, including 4% (6% in border villages) subsidized by the government. Loans are extended in Armenian drams, the average loan is 625,000 drams and the grace period is six months, after which only interest is paid and another six months is provided for subsequent payments.
Lending terms should be revised in Armenia, Chilingaryan told a press conference Friday. In particular loans should be provided for longer periods and at lower rates, he said.
According to Chilngaryan, it is extremely difficult to achieve tangible results in agriculture during a short period and make all payments on rural loans. Apart from this, Armenia’s climate conditions, regular frosts in particular, create additional difficulties and risks for effective farming, hence the government should use more flexible policies on preferences and compensations.
The loan rates should be decreased at least by up to 10% and the time allowed for the repayment should be several years, the expert said.
According to official information, agriculture loan rate subsidizing expenses amounted to 634.5 million drams (about $1.5 million) in 2013, an increase of 9.8% compared to the year before. ($1=408.12drams). –0--