ProCreditBank intends to become bank number one for Armenia’s small and medium business

ARKA: Would you please introduce the concept of the ProCreditBank in relation to Armenia?

A. Abrahamian: The ProCreditBank concept on the whole and for Armenia in particular aims at two main objectives: we want to become the bank number one for small and medium enterprises and to be a good neighbor-bank for common people living or working not far from our branches. Thus, out policy and relations with clients will be based on these two basic concepts. We will be a universal bank providing all banking services mainly to this target group.

 As to small and medium business, we offer a wide range of rates, and along with small credits we intend to extend also large credits. We are well aware how one should work with representatives of this sector, we do know their needs and we understand the business of this type of clients and we are going to offer them adequate and good products. Moreover, we will be providing our clients with wide range of retail products and basic services like opening of an account, utilizing an account, various sorts of deposits and savings options. Along with it, we attach particular importance to forming culture of savings among clients we will be working with, namely people with medium or lower level of income as a rule. We have selected them because this group of population is the one most vulnerable to cataclysms, changes, shocks and unexpected expenditures.

If they form a standard of saving they will be able to save even small amounts. They will start depositing 300-500Drams and accumulate funds for solving particular problems. Of course, we will guarantee the security of their savings. This way we will solve two problems: first, we will ensure the safety of savings, and second, we will help understand that money can provide additional income and it is better to keep it in the bank than at home.         

ARKA: Armenia is a small country where 22 banks operate today, including major banks like HSBC Bank Armenia, AKBA-Credit Agricole Bank, VTB Bank (Armenia). Troyka Dialog, Byblos Bank and Gasprombank declared their intent to work in Armenia – all they offer good service packages. How do you feel in such surroundings?  

A. Abrahamian: As in conditions of normal open competition. Every bank builds its own development strategy, has its own target group and carries out its own mission. Of course, banks compete more in some fields than in others. But, no doubt, the market is quite competitive, and the competition is quite tough.  In the last five years, the market changed a lot, and good growth rates have been recorded in the country’s banking system. Of course, we do not fear the competition, but we clearly understand that it will not be easy to work here. We will be trying to win the confidence of clients and the population through the quality, efficiency, accessibility of our products and professional service.  

ARKA: Do you have any unique services package?

A. Abrahamian: We will start from basic products that, more or less, are offered to everyone. Of course, we will be offering specific features, but they will relate to the terms of these products. In fact, we will not be intensely working in the market of consumer credits as we do not consider it a high priority. Of course, we will be extending consumer credits but mainly to clients who have accounts in our bank, who use our products and need consumer credits. Yet, the focus will be placed on business lending; in terms of other products we will intensify our efforts to attract deposits. Being an international bank and having an opportunity to attract resources from abroad, we will simultaneously make active efforts to attract means from population and, as I have already mentioned, develop a standard of savings. We have a plenty of ideas as to how to improve the level of awareness among clients, and here our efforts will be particularly active; we will be carrying on explanatory work to help people know our bank, look into and then make their choice.
 
ARKA – Your minimal program is clear. What about your mid-term or long-term strategic program?

Abrahamyan: We have plans intended for one year and five follow-up years. We are going to develop ProCreditBank’s branch network all over the country, not only in Yerevan. We don’t limit the number of branches. We’ll open branches wherever they are needed, wherever potential clients’ demand for the bank’s services is seen. The bank will launch three branches before the end of the first half of the year another branch by late 2008 in Yerevan. Two others will start functioning in provinces later this year. As a result, the bank will have six branches.   

ARKA – Are lending interest rates already set?

Abrahamyan – Crediting conditions are worked out with taking into account market requirements. The bank doesn’t want to make some damping at the market. We intend to attract clients by providing high-quality, quick and professional services.  


ARKA – Could you, please, point out the small- and mid-scale business sectors you prefer?

Abrahamyan – There will be no limits. It is natural that we won’t finance agriculture sector from Yerevan, but we’ll add this sector to our focuses after opening branches in those provinces in need of such kind of loans. This kind of financing will join our top-priority focuses in the future. We left some kinds of business out of our focuses – we don’t finance tobacco, alcohol, arms, casino and some speculation because of our principles. We have set no other limits, including geographical.  

ARKA – What do you think, has economic situation in the country played certain role in the bank appearance not five years ago, but at this very moment?

Abrahamyan – For sure, we are familiar with Armenian market, our company has been working here since 1999. We keep our eye on the market and economic development as a whole.  The country’s economic growth is very impressive. Armenia has always been attractive, and the idea of opening a bank here was conceived long ago, since ProCredit group are dynamically developing all over the globe.

The idea was put into reality at this very moment, and favorable economic environment played a major role in that.
I would like to say that the bank opening in Armenia was scheduled for 2007. Before that, we worked in one South Caucasus country - Georgia - from 1999.  We have banks in East Europe, former soviet republics and Balkan countries.
We opened banks in Mexico, Columbia, Honduras and Sierra Leone last year.  

ARKA – What will be ProCreditBank’s contribution to Armenian banking system?

Abrahamyan – We brought certain new ideas, we have advantage such as a large network of banks, all of which are dynamically developing at very competitive markets, and they manage to survive thanks to maintaining constant development and introducing new technologies.

The exchange of new ideas and innovations is constant in the group. It is clear that when we start putting these new ideas into practice, other banks won’t stand on the sidelines of these developments – they will react to that.

Motivating influence of this business development is competition. That is why it is necessary to invent more interesting and effective instruments for clients.  

ARKA - What do you think about syndicated credits provided by international financial organizations to Armenian banks? 

Abrahamyan – It is a positive fact showing again that this is a healthy and stably developing system. Important is that international banks are starting to work directly with Armenian banks. It is also very important that rating agencies give them ranks, which open direct gates to world markets before them for attracting resources. These developments are speeding up Armenian banking system integration into world market. I would like to say that all our “sister banks” in other countries enjoy ranks as well, in particular Fitch.  

ARKA – What are your worst-case and best-case scenarios?

Abrahamyan – Our key objective is to become location number one for our clients, not to capture some segment at the market. Our goal is to play major part in banking system for the number of its clients, and attracted deposits.    

ARKA – What would you wish to your potential clients?

Abrahamyan – I wish a good luck, new ideas and new opportunities for their business development. I also wish all their ideas to be put into reality.  We, in our turn, will try to help them. -0--