Target group – applications for agricultural small loans are accepted by “Farm Credit Armenia” UCO CC from private individuals and legal entities engaged in agriculture in the regions of the RA, who are members of “Farm Credit Armenia” cooperative. Member-stockholders of the cooperative can be private individuals and legal entities engaged in agricultural production, processing of agricultural products, and other related activities, commercial, industrial or other business.
The interest accrued to the loans is calculated towards the actual balance of the loan, at nominal interest rate, assuming that a year consists of 365 days.
The annual actual interest rate shows the cost of the loan for you in case if you pay the interest amount and make other payments according to the specified schedule and sizes.
Example of loan interest calculation
Annual interest amount = balance of the loan amount x annual interest rate /365
Balance of the loan amount – AMD 2,000,000
Annual interest rate of the loan - 14%
Daily interest amount = 2,000,000 x 14 %/365 = 767.12
Size of penalties - In case of delays in repayment of the loan interest or principal amount, the client pays penalty of 0.13% of the overdue amount (overdue principal amount and overdue interest amount of the loan) for each day of delay, until the 270th successive day of being overdue. Starting from the 271st successive day of being overdue, calculation of penalties ceases.
Possibility of early repayment – The client may repay the loan before the deadline specified in the agreement. Except if the loan is disbursed with the funds provided by the MCA Armenia Foundation, as well as, irrespective of the fund, except for agricultural loans with an amount up to AMD 2 million and its equivalent in foreign currency, when repaying the loan in full, the borrower pays penalty for early payment, in the size specified by the tariffs.
In case of agricultural loans disbursed with the funds provided by the MCA Armenia Foundation, as well as, irrespective of the fund, in case of agricultural loans with an amount up to AMD 2 million and its equivalent in foreign currency, no penalty for early payment of loans is charged.
Frequency of instalments - monthly, quarterly, semi-annual, annual, free schedule. When developing the repayment schedule, the cash flows generated by the client’s business and its seasonality shall be taken into account.
In case of a free schedule, a grace period can be set: up to 6 months for repayment of interest and up to 12 months for repayment of the principal loan amount.
The guarantor should possess property or a share in any immovable property that belongs to him/her through the ownership right or should be a legitimate employee of any state or international organization operating in the RA, well-known in the business environment and having good reputation, or should be a CO client, with the CO having financial analysis regarding the client’s solvency, performed not more than 6 months before.
Loan service fee: 0-0.1% per month, depending on the source of financing.
A loan servicing fee is only required for the loans disbursed through the Millennium Challenge Account (MCA) and International Fund for Agricultural Development (IFAD) funds.
The loan service fee is calculated on the actual loan balance.
Loan service repayments are determined on the day of each loan repayment schedule of loan principal / interest rate.
- - In case of cash operations with commercial banks and payment organizations, the customer may be required to pay cash withdraw fee up to 0.25% of the amount.
- - When repaying the loan principal and interest by the customer through the payment terminals payment organizations, a commission fee of 100-300 AMD will be charged for each transaction.
Approval of the loan application – The decision regarding the loan application is taken within maximum 5 working days after receipt of the application. The client is informed about the decision regarding the loan application within one banking day.
The loan is disbursed within one banking day following submission by the client of the full package of the required documents and verifying the contracts.
Loans with the funds of MCA Armenia Foundation are provided in case of positive conclusion of the Foundation.
The loan amount is provided in non-cash manner, via banks and payment and settlement organizations operating in the RA.
Factors for approval of the loan application
- Compliance of the client’s creditworthiness level with the requirements of the organization;
- Positive credit history;
- Conformity of the loan security level;
- Conformity of the purpose of the loan.
Factors for rejection of the loan application
- Inadequate level of the client’s creditworthiness, based on the requirements of the organization;
- Submission of unreliable data by the client;
- Negative credit history;
- Non-conformity of the pledge, guarantors;
- Non-conformity of the purpose of the loan.
Documents required to obtain a loan
- Personal identification document;
- PSN or a reference on absence of a PSN;
- Documents evidencing the right of ownership for the collateral item offered by the client;
- Copies of passports of the guarantors and pledgers.
Agricultural loans are processed at the branches of the organization. Before signing loan agreements, in case of agricultural loans with an amount up to AMD 5 million and its equivalent in foreign currency, the client is provided with an Individual leaflet, in accordance with the CBA’s Regulation 8/05 “PROCEDURE, CONDITIONS, FORMS, AND MINIMUM REQUIREMENTS FOR COMMUNICATION BETWEEN THE BANK AND DEPOSITOR, LENDER AND CONSUMER”.
. You have the right to communicate with the credit institution in the way you prefer, by mail or electronically. Receiving information electronically is the most convenient. It is available 24/7, free from the risks of paper information loss and ensures privacy. In the case of foreign currency loans, loan repayments may be affected by differences in foreign currency exchange rates.
. The actual interest rates of loans in US dollars were calculated based on the average exchange rate of the US dollar published by the Central Bank of Armenia on 26/02/2021. The actual annual interest rate may change depending on the change in the magnitude of the exchange rate published by the Central Bank of Armenia.
. In case of a change of 2 or more percentage points in the bank interest calculation rate set by the Central Bank of the Republic of Armenia, the organization can revise the current loan interest rate, but not more than twice the current bank interest rate.
. Your property (home, car, or other) may be seized if you fail to make your interest and loan payments on time.
. In case of non-fulfilment or incomplete fulfillment of the obligation by you, the lender sends the data to the credit bureau after 3 working days, where your credit history is formed. You have the right to get your credit history from the credit bureau once a year for free.
Attention: a bad credit history can prevent you from getting a loan in the future.
. In case of non-fulfillment of obligations by the borrower, the obligations can be paid off at the expense of other property of the borrower, if the collateral is not sufficient to repay the obligations at the expense of the collateral (at the expense of the money received from the sale of the subject of the collateral).
In case of non-performance of obligations for the repayment of credit expenses (at the expense of the amount obtained from the realization of collateral), the obligation may be redeemed at the expense of lessee’s other property.