Agricultural loans subsidized by the RA Government

AMDAMD or equivalent USD

Currency

1.250.000 - 40.000.000

Credit/Leasing Sum

12 - 14 % (սուբսիդավորվող)

Credit/Leasing Percent

12.36 - 14 %

Credit/Leasing actual interest rate

3 - 96 Month

Credit/Leasing duration

AMD

Currency

Credit/Leasing Sum

Credit/Leasing Percent

Credit/Leasing actual interest rate

Month

Credit/Leasing duration

Loans from the “Loan interest subsidy program” for the development of intensive horticulture, the investment of modern technologies and the promotion of the production of non-traditional high-value crops- 

The interest on the loans of “The loan interest subsidy” program for the development of intensive horticulture, the introduction of modern technologies and the promotion of the production of non-traditional high-yielding crops are subsidized by the government (partially or fully), as a result of which the borrower pays the interest on the loan calculated at 2% per year, and agricultural cooperatives, economic operators operating in the areas of border settlements receiving social support, citizens disabled as a result of combat actions or operations during the performance of military service duties, young people operating in agriculture

(physical personս under the age of 18-35), in the case of the introduction of modern garden and/or irrigation systems, also those with over-normative water demand Loan interest for land investors is fully subsidized.

Target group - "Farm Credit Armenia" UCO CC member- shareholders engaged in agriculture in the regions of the Republic of Armenia can apply for a loan of the agricultural loan subsidy program. Citizens and legal entities engaged in agricultural production, processing and other related activities, commercial, manufacturing or other entrepreneurial activities can become members-shareholders of the cooperative.


 

Credit percent calculate example

Loan interest is calculated on the actual balance of the loan with a nominal interest rate, assuming 365 days a year.
The actual annual interest rate shows how much the loan will cost you if you make the interest payments and other payments in the specified terms and amounts.
 

Example of loan interest calculation

 

Annual interest amount = balance of the loan amount x annual interest rate /365

Example:

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. In case of "Agricultural Loan Subsidizing Program" Loans  no penalty for early payment of loans is charged.


 

In accordance with the relevant decision of the Government of the Republic of Armenia and the conditions of the loan agreement of the CO interest rate subsidy program, in case of detecting falsity in the information provided by the borrower, using the loan for non-targeted purposes, as well as having an overdue obligation for the given loan for more than 60 days in the previous 12 months, or if the loan is classified in a class other than the standard class, the loan will be canceled. the interest subsidy will cease, leading to an increase in the interest actually paid by the borrower.


Repayment frequency

 

Repayment frequency– monthly, quarterly, semi-annually, annually, free schedule. When setting the repayment schedule, cash flows and seasonality in the client's economy are taken into account. In the case of a free schedule, a grace period of up to 12 months can be set for both interest and principal payments. At the same time, the one-time postponement of interest cannot exceed 6 months, the principal - 12 months.

 

Amounts paid for loan repayment are paid in the following order:

1. Penalties, fines,

2. Overdue interest,

3. Overdue principal amount,

4. Accumulated interest,

5. Principal amount of the loan.

Collateral

Security - Collateral, guarantee.

The following can be accepted as collateral items:

-         real estate (production areas, buildings, houses, apartments, land plots, fish ponds, gardens, and other real estate);
-         vehicles – passenger cars and trucks;
-         agricultural machinery;
-         construction machinery;
-         production lines, equipment;
-         large and small cattle, sows.

The agreement for pledge of real estate is subject to notarial verification. 
The right of pledge for real estate and vehicles is subject to state registration.

The loan to collateral ratio cannot exceed 80%.

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.

Other fee

-     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.

In case of collateralized loans, possible costs of the customer for the services provided by third parties.

Property Pledging Articles

Property Pledging Costs

Real Estate

Vehicles

Other movable property

Pledge value estimation

15,000 – 80,000

 

 

 Certificate on pledge release from the ban

10,000

3,000

 

 Notarization of the agreement

10,000 – 20,000

 

 

 State registration of the right for the pledge

3000 – 26,000

3,000

2,000

 

Credit/Leasing bid confirmation

Approval of the loan application – The decision regarding the loan application is taken within maximum 7 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 completion of the pledging process.

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

Availability of a certificate confirming the participation of the client in agricultural loan interest rate subsidy training program.

- 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

-  Absence of a certificate confirming the participation of the client in agricultural loan interest rate subsidy training program.

 

-  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.

On the basis of the "Know your customer" principle, for the purpose of due diligence of the customer defined by the RA law "On Combating Money Laundering and Terrorist Financing", additional documents or other information may be requested from the consumer, as well as additional questions may be asked to the consumer during oral communication. (if such a request exists).

Agricultural loans are formalized in the organization's branches.

ATTENTION: When applying for a loan, the lender will provide you, the guarantor(s) (if any) with an individual sheet of essential terms of the consumer loan, in which the individual terms of the loan to be granted to you will be presented.

During the term of the contract, loan statements are provided via e-mail at thirty-day intervals, unless the customer chooses another communication method. Loan statements (including a copy) are provided free of charge. The amounts of fees charged for the provision of information are defined in the tariffs.

Credit Calculator

The answer is not final because it is calculated individually.
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Attention

. 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.