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 270^th successive day of being overdue. Starting from the 271^st 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.

Frequency of instalments

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 12 months for repayment of interest ․ 

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.

Membership fee of the cooperating – AMD 3,000 (paid once)
Equity participation fee – 1.5 % of the loan amount but not more than AMD 240,000 for each loan (paid when receiving each loan).

The above-mentioned amounts are recorded as the cooperative member’s stockholding in the equity capital of the cooperative.
Other payments are defined by the tariffs of “Farm Credit Armenia” UCO CC.

Pledge of real estate

Pledge of vehicles

Pledge of other movable property

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.

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”.