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MCA WtM Loan

Farmers, agricultural enterprises and related businesses/organizations operating in the Republic of Armenia, which comply with Project criteria
Production of high-value farm crops, building of greenhouses, establishment of orchards, modernization of agricultural machinery and equipment, organization of post-harvest processes, processing and marketing
  • Loan amount: AMD 300,000- 30,000,000
  • Term: 24-84 months
  • Annual interest rate: 10-11.5%
  • Loan interest amount is calculated on outstanding loan balance
  • Borrower pays a lump-sum fee for provision of loan, at effective tariffs established by the Organization as of the date of loan disbursement (view details: Tariffs established by the Organization )
  • Loan interest is calculated on the outstanding loan balance
  • Repayment schedule is produced according to cash flows of the borrower, potentially permitting up to 24 months grace period on loan principle and interest
  • Collateral (loan security):  movable and immovable property
  • Loan is provided non-cash (through transfer)
  • The borrower may repay the loan early
  • Assessment of a customer’s creditability and its credit history are factors considered in making a  decision on satisfaction/rejection of loan application
  • The nominal interest rate of loan remain unchanged during the entire effective period of the loan
  • In case of non-target use of the loan, the lender may revise the nominal interest rate of the loan up to 20% annually, in accordance with the Loan Agreement
  • In instances where the borrower fails to repay the loan principle and interests in due time, information about the client will be recorded in the Credit Registry
  • In instances where the borrower fails to fulfill its obligations and if the amount collected from the realization of the pledged property is insufficient to cover the Company’s claims, the Company shall be entitled to compensation from other property and/or funds of the borrower.

Calculation of loan interest rate

Loan interests are calculated on the actual loan balance, considering 365 days in the year. The nominal interest rate of the loan remains unchanged during the entire effective period of the loan.

If the two-fold of the banking rate (settlement banking interest rated established by the CBA) is less than the interest rate defined by the Company, the two-fold banking rate shall be defined as a maximum interest rate.

Example of calculation of loan interest amounts

Simple example of calculation of a loan interest rate: (Loan amount* interest rate)/ number of months (or days)

Thus, when providing a loan of AMD 3,500,000, at 11.5% annual interest rate and 60 months of repayment period, the average monthly interest due to payment shall be AMD 3,500,000*0.115/60= AMD 6,708.  It should be mentioned that the actual amount of monthly interests would depend on the loan repayment schedule, yet not exceed the average amount specified above.

Other fees

  • Lump-sum fee equal to 1,5% of the loan amount
  • Expenses incurred by the borrower in relation with loan provision may include:
  • Notarization, if the collateral is an immoveable property: AMD 3,000 – 15,000
  • State registration of the lien, if the collateral is an immoveable property or a transport vehicle: AMD 25,000 – 35,000
  • State registration of lien of the transport vehicle: AMD 3,000

Penalties

  • In case of delays of loan interests and/or principle payment, a fine is imposed  at the rate of 0.2% on overdue amount  (overdue loan amount and overdue interest amount), for each day of delay

Objects of collateral may be:  

Any divisible and indivisible property accepted by the Company and in circulation, which may be subject to confiscation in cases permitted by the RA legislation. The following items may serve as collateral:

  • Immovable property (industrial premises, lands, buildings, structures, private houses, apartments and other immovable property)
  • Transport vehicles
  • Mechanisms (machinery) and equipments
  • Various inventory holdings
  • Other property

The maximum loan/collateral value ratio may not exceed 80%.

Appraisal and/or insurance of the object of collateral by a specialized organization are not mandatory.

Attention

In the event of failure to fulfill, or improper fulfillment of, obligations assumed by the borrower, the Company takes relevant measures to confiscate and realize the collateral in the manner stipulated by the RA legislation.

Deadlines for the loan approval and provision

The approval for the loan application, and provision of the relevant information to the applicant as well as the loan provision to the borrower is handled maximum within 20 days.

If the amount collected from the realization of the pledged property is insufficient to cover the Company’s claims, the Company shall be entitled to compensation from other property and/or funds of the borrower.

Documents required for loan provision: 

For legal entities

  • Loan application
  • Decision on appointment of the director (excerpt from, or a copy of, the order): if the director does not act as a party of the transaction, a power of attorney of an authorized person issued by the director or other competent authority
  • A copy of the ID document of the director or the authorized person
  • State registration certificate (copy), with addendum thereof, and the TIN (taxpayer’s identification number) code
  • Charter (Bylaws) and Articles of Incorporation (copy)
  • Financial statements for the last financial year and the last quarter of the current year
  • Statements on debts from tax and social welfare (pension) authorities
  • Decision of the applicant’s competent authority on applying for loan and pledging the applicant’s (or other persons’) property (rights to property) to secure the loan
  • Ownership certificates of pledged property and grounds  for ownership (copy); if the collateral is an equipment(s), its passport; if vehicle, its registration certificate (copy)
  • If necessary, the Company may request additional documents

For physical entities (individuals)

  • Loan application
  • ID document
  • Ownership certificates of pledged property and grounds  for ownership (copy); if the collateral is an equipment(s), its passport; if vehicle, its registration certificate (copy)
  • Information about incomes (salary or other incomes)
  • If necessary, the Company may request additional documents