USAID study: 38% of farms in Armenia have debt liabilities

YEREVAN, November 14. /ARKA/. Some 38% of farms in Armenia have debt liabilities, according to the USAID Finance for Economic Development (FED) Program’s study “Awareness, Access and Usage of Financial Services by Micro, Small and Medium Enterprises in Rural Areas of Armenia” that was presented Friday in Yerevan. Representatives of provincial companies having up to 100 employees were surveyed in 2013. The study revealed that 69.3% of them have taken loans from banks, 30.1% have borrowed money from credit organizations, 11.8% owe money to individuals, 17.6% owe money to pawn houses and 7.8% have other debt liabilities. The figures show that farms’ debt liabilities have grown 2.5 times, compared with 2008. It has also become known that 66% of micro, small and medium enterprises and 73.3% of farms see no need for using financial services, and 26.9% of MSMEs and 26% of farms have no confidence in banks. According to the study, 25% of the surveyed MSMEs and 26% of farms were well aware of financial services, 62% and 43% respectively showed partial awareness and 13% and 31% had absolutely no idea of financial services. The second stage of the study is planned to be carried out in 2015 and the third, aimed at summarizing the results for final assessment, in 2016. The Finance for Economic Development (FED) project enhances the efficiency and technical capacity of Armenian financial institutions to provide services and financing to enterprises in rural and urban areas of Armenia. The project supports policy and regulatory reforms that will help improve the financial environment and increase access to credit for small and medium enterprises toward broader economic growth. ---0----