KfW to inject €20 million in Armenia’s mortgage lending

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Economy

09.04.2009, 22:33

The German development bank Kreditanstalt fuer Wiederaufbau (KfW) plans to extend €20mln loan to Armenia by late June to boost the country’s mortgage lending programs, Chairman of the Central Bank of Armenia (CBA) Arthur Javadyan said Wednesday at the Yer

YEREVAN, April 9. /ARKA/. The German development bank Kreditanstalt fuer Wiederaufbau (KfW) plans to extend €20mln loan to Armenia by late June to boost the country’s mortgage lending programs, Chairman of the Central Bank of Armenia (CBA) Arthur Javadyan said Wednesday at the Yerevan-based Novosti International Press Centre.

On August 28, 2008, the RA Government made a decision to allocate a €6mln guarantee to CBA, as part of the agreement on mortgage lending development KfW and CBA signed on December 28, 2007.

The German bank agreed to extend the loan to Armenia, provided that CBA offered a similar guarantee.

According to Javadyan, there remains a surplus of €1mln on the account of the KfW program implemented by the German-Armenian Fund.

“We are negotiating with the German development bank KfW over expanding the sum by another €20mln or 10mln drams,” the CBA chairman said, adding the Central bank stands ready to earmark extra funds for mortgage lending if commercial banks are interested in the program.

Mortgage loans in Armenia currently total 84mln drams, Javadyan said, pointing out the local banks’ conservative attitude to mortgage lending and their refusal to reinvest funds for new mortgage loans.

In Q4 2008, Armenia’s banks extended mortgage loans worth 81.1bln drams, with mortgage lending comprising 13.01% of the banks’ credit portfolio. ($1-372.65 drams) Z. Sh. –0--

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