Inaccessibility of loans hinders development of Armenian SME

YEREVAN, September 18. / ARKA /. One of the biggest problems hindering development of small and medium-sized businesses in Armenia is inaccessibility of loans and the other big problem are gaps in the tax administration system, according to Karen Gevorkyan, deputy director of the National Centre for the Development of Small and Medium-Sized Entrepreneurship.

He said the core activity of the National Centre for the Development of Small and Medium-Sized Entrepreneurship is to help solve these problems. According to him, the Center  helps annually some 3000 beginners to get long-term and unsecured loans at affordable terms. 

High interest rates on loans are also a problem, he added. ‘It is desirable that banks provide a wider range of loan products,’ he said.

With regard to the tax legislation, Gevorgyan said the problems arising from the legislation are not as important as the difficulties arising in the course of tax administration, namely, the corruption.

Besides, he said development of SMEs is hindered by the fact that many entrepreneurs are unaware of  the changes in the tax law, of  their rights and responsibilities.

According to the National Union of Employers of Armenia, SME lending in 2012 amounted to about $15 million, while in 2001-2002 the figure stood at $30-$40 million, and at about $20 million in 2007-2008. 

According to the ministry of economy, in 2007-2012 the government released 98 billion drams for the promotion of small and medium entrepreneurship. This year the government has earmarked 778 million drams to that end. Also 6.6 billion drams were to be provided for SME development by the Universal Credit Organization. ($ 1 - 409.61 drams). -0-