- farmers and entrepreneurs operating in the RA, 18-65 age group, who:
- are engaged in agricultural activities or entrepreneurship, and have work experience in the particular field
- own property and/or movable or immovable property under joint ownership and/or fixed assets
- are not engaged in unlicensed activities or in other activities prohibited by laws
- Loan amount and currency: AMD 300,000 -3,000,000 or 500-6,000 USD
- Term: 6-36 months
- Annual interest rate: 13-22% (AMD) or 10-18% (USD)
- Client /Borrower/ pays a lump-sum fee for provision of loan (loan servicing), at effective tariffs established by the Organization as of the particular date (view details: Tariffs established by the organization
- Loan interest amount is calculated on outstanding loan balance
- Loan security: guarantee of physical and legal entities
- Repayment schedule is produced according to cash flows of a borrower with repayment periodicity of no less than twice in 12 months
- Loan is provided noncash or in cashier’s check
- Client’s creditability assessment and credit history are factors considered in making a decision on satisfaction/rejection of loan application
- Loan may be repaid early, yet, where loan is repaid early – within six months after the date of loan provision – the borrow shall pay a penalty equal to 2 percent of the early repaid amount
- 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.
- In case of failure to fulfill obligations by a borrower, both the particular borrower and the guarantors shall bear liability at the expense of their property and/or other funds.
- The number of guarantors for loan provision shall be determined as follows:
- Up to AMD 500,000– at least 2 guarantors
- AMD 500,001-1,000,000 – at least 3 guarantors
- AMD 1,000,001-2,000,000 – at least 4 guarantors
- AMD 2,00,001-3,000,000 – at least 4 guarantors
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 2,000,000, at 18% annual interest rate and 36 months of repayment period, the average monthly interest due to payment shall be AMD 2,000,000*0.18/36= AMD 10,000. 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.
- Lump-sum fee for loan provision equal to 2% of the loan amount
- 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
- At 2% of the amount repaid during no later that six months since the date of signing of the loan agreement.
In the event of failure to fulfill, or improper fulfillment of, obligations assumed by the borrower, the Company takes relevant measures to confiscate and/or realize the property and/or other funds of the borrower and/or the guarantor, 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 10 days.
Documents required for loan provision:
- Loan application
- ID document
- Information about incomes (income from agricultural activity and other incomes)
- 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)
- ID documents of guarantors
- Copies of ownership certificates of immovable and/or movable property owned by the guarantors