Supply Chain Financing "Rich Milk"

AMDAMD or equivalent USD

Currency

300.000 - 40.000.000

Credit/Leasing Sum

12 - 13 %

Credit/Leasing Percent

12.43 - 15.13 %

Credit/Leasing actual interest rate

3 - 84 Month

Credit/Leasing duration

-

Currency

-

Credit/Leasing Sum

-

Credit/Leasing Percent

-

Credit/Leasing actual interest rate

- Month

Credit/Leasing duration


Target group - "Farm Credit Armenia" UCO CC "Arat Kat" loan type provides to the participants of the value chain formed around "Golden Goat" CJSC, namely milk suppliers and "Golden Goat" CJSC. The loan is provided for the period of 3-36 months for the purchase of working capital, and for the period of 24-84 months for the purchase of fixed assets. If at least 50 percent of the loan amount is for the purchase of fixed assets, then the loan can be provided for the period specified for fixed assets.

Credit percent calculate example

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

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. 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.

Repayment frequency

A free schedule can be defined for loan repayment, which is conditioned by:

-         Seasonal peculiarities of milk processing, which means that the principal repayments depend on the months when milk is processed.

-         Seasonal incomes obtained from other branches of agriculture 

A repayment schedule on annuity can be defined, if there are business activity incomes or other monthly incomes based on a financial analysis.

Collateral

Guarantee 

The loans with up to 1.5 million Armenian drams can be guaranteed by at least 1 person. 

- At least one of the liabilities should meet the criteria defined by the loan legislation of the CC (primary liability).

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. 

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%.

Other fee

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.

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.

Before signing loan agreements, in case of loan “Rich Milk” 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”.



Factors for approval of the loan application

- Cases of customers incorrespondence to the loaning target group (Supplier, Processor)

- 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 at least 1 year experience of milk-processing contract with the processor and of experience in agriculture or other business sphere.

-  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 

-   Copy of the legal entity’s/private entrepreneur’s state registry certificate and the copy of TIN

-   Copy of the identification document of the legal entity’s director

-   Copy of the legal entity’s Charter

-   Statement from the state register book about the legal entity

-   Copy of the ownership certificate of the legal entity’s/private entrepreneur’s  place of activity or its renting agreement

-   Decision of the legal entity’s founders on loan disbursement

-   Copies of identification documents of the legal entity’s founders and other relevant people.

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.