About 30% of enterprises supported by SME Development National Center survive in their first year
03.07.2013,
17:13
YEREVAN, July 3. /ARKA/. Only 20 to 30% of the enterprises established in Armenia under the “Small and Medium Entrepreneurship Development National Center” Fund’s support survive in the first year of their activity, Armenian Economy Minister Vahram Avanesyan said Wednesday, commenting on the Control Chamber’s 2012 activity report.
YEREVAN, July 3. /ARKA/. Only 20 to 30% of the enterprises established in Armenia under the “Small and Medium Entrepreneurship Development National Center” Fund’s support survive in the first year of their activity, Armenian Economy Minister Vahram Avanesyan said Wednesday, commenting on the Control Chamber’s 2012 activity report.
“The Control Chamber has found out that the program is being implemented not effectively, since some companies provided with financial support have stopped functioning,” he said. “There couldn’t be something other, since the program has been fraught with risks.”
The minister said that there is a wrong idea about effectiveness of enterprises in Armenia, according to which a company should earn 40-to-60-percent profits just for the first year of its activity.
He said 85% of this SME-supporting program is being implemented in border areas, and this increases risks, but it would be wrong not to implement the program because of risks.
“On the contrary, this program should be expanded,” Avanesyan said stressing that each of these companies creates three jobs, on average.
He also added that 80% of small and medium enterprises across the world stop operating in their first year, and 90% in the second year.
The Fund earmarked AMD 778 million in 2013 for lending to small and medium companies.
In addition, SME Investment universal credit organization will allocate AMD 6.6 billion for this purpose, and AMD 150 million will be taken from the government budget.
According to the economy ministry’s figures, about AMD 98 billion has been targeted for fostering SMEs in Armenia over a period between 2007 and 2012.
Some 60,000 companies operate in Armenia now. Of them, 92% are small and medium. ---0----
“The Control Chamber has found out that the program is being implemented not effectively, since some companies provided with financial support have stopped functioning,” he said. “There couldn’t be something other, since the program has been fraught with risks.”
The minister said that there is a wrong idea about effectiveness of enterprises in Armenia, according to which a company should earn 40-to-60-percent profits just for the first year of its activity.
He said 85% of this SME-supporting program is being implemented in border areas, and this increases risks, but it would be wrong not to implement the program because of risks.
“On the contrary, this program should be expanded,” Avanesyan said stressing that each of these companies creates three jobs, on average.
He also added that 80% of small and medium enterprises across the world stop operating in their first year, and 90% in the second year.
The Fund earmarked AMD 778 million in 2013 for lending to small and medium companies.
In addition, SME Investment universal credit organization will allocate AMD 6.6 billion for this purpose, and AMD 150 million will be taken from the government budget.
According to the economy ministry’s figures, about AMD 98 billion has been targeted for fostering SMEs in Armenia over a period between 2007 and 2012.
Some 60,000 companies operate in Armenia now. Of them, 92% are small and medium. ---0----
