Terms
tariffs
Type
Agricultural loan*
Borrower
RA resident individual, private entrepreneur and legal entity
Loan purpose
Greenhouse development**
Loan Currency
AMD
Loan Amount
Minimum: 100,000,000 AMD
Maximum: 15,000,000,000 AMD, but not more than the permissible limit provided for by the maximum risk standard for one borrower established by the Bank's internal legal acts
The maximum amount of the loan(s) provided to the same borrower cannot exceed 15,000,000,000 AMD.
The loan is provided in a non-cash manner and in stages (determined by costs)
Annual Nominal Loan Interest Rate (Fixed)
14%
Terms of annual nominal interest rate revision
In case of misuse of loan funds by the borrower, as well as in case of false or unreliable information, the Bank has the right to unilaterally increase the loan interest rate or demand full or partial early repayment of the loan.
Interest rate subsidy amount
100 000 000 - 3 000 000 000 AMD 8 percentage points
- for young people engaged in agriculture - individuals and private entrepreneurs aged 18 to 35, individuals and private entrepreneurs aged 63 and over, and separate commercial legal entities defined by the Program*** (at the time the first loan agreement for a given greenhouse project comes into force): 9 percentage points
3 000 000 001 - 9 000 000 000 AMD 7 percentage points
- for young people engaged in agriculture - individuals and private entrepreneurs aged 18 to 35, individuals and private entrepreneurs aged 63 and over, and separate commercial legal entities defined by the Program*** (at the time the first loan agreement for a given greenhouse project comes into force):89 percentage points
9 000 000 001 - 15 000 000 000 AMD 6 percentage points
- for young people engaged in agriculture - individuals and private entrepreneurs aged 18 to 35, individuals and private entrepreneurs aged 63 and over, and separate commercial legal entities defined by the Program*** (at the time the first loan agreement for a given greenhouse project comes into force): 7 percentage points
Loan term
24-96 months****
Loan principal payment grace period
0-12 months*****
Subsidy conditions
- Customers cannot use other state support programs implemented in the agri-food sector for the same work on the same land plot.
- The loan interest rate subsidy is terminated if:
there are overdue liabilities of the borrower for a given loan for more than 60 days in total for one year (the previous 12 months) or as a result of overdue liabilities to the Bank, the loan is not classified in the standard class according to objective and subjective criteria according to the current financial assets classification procedure
the requirements set by the Program were not met, the loan was not used for its intended purpose, or as a result of monitoring conducted by the "Economic Development and Financing Structure" of the Ministry of Economy of the Republic of Armenia and/or the Bank, a violation of the terms and requirements of the Program was detected
the borrower provided obviously false information
the agreement between the borrower and the Bank was terminated early
the greenhouse constructed during the term of the loan agreement is not used for its intended purpose.
- The loan subsidy is terminated from the previous loan repayment date specified in the loan repayment schedule.
- In cases of termination of the loan interest rate subsidy, the Bank unilaterally changes the loan interest rate, applying the maximum interest rate applicable in accordance with the contractual term of the loan within the framework of the Bank's "Agrofast" agricultural loan type.
- In cases of non-target use of the loan by the Borrower (including cases of early termination of the loan agreement at the initiative of the Borrower and failure to complete the work provided for by the Program), failure to comply with the Program requirements or providing obviously false information, as well as in cases of non-target use of the greenhouse constructed during the term of the loan agreement, the amount of subsidy provided by the Borrower until that moment is subject to return.
Requirements to the borrower
Credit history:
No delinquency and/or total number of days overdue for the last 12 months shall not exceed 30 days.
No current overdue liabilities.
Method of payment
Annuity (equal monthly payment of principal and interest).
Differentiated (equal monthly payment of principal and interest).
Individual payment schedule, depending on the specifics of the business.
Repayment method at the customer's choice.
COMMISSION FEES, PENALTIES AND FINES
Subsidy amount
10 percentage points
Loan disbursement and service fee
Not defined
Penalty for overdue principal
0.1% daily
Penalty for overdue interest
0.13% daily
Penalty for early repayment of the loan
Not applicable
COLLATERAL
Collateral
Real estate and/or
Guarantee/s
- In the case of clients who are legal entities, personal guarantees of the founders of the business and the beneficial owners,
- In the case of individual entrepreneurs, if the beneficial owner is a third party, a guarantee of the beneficial owner.
Movable property. In the event that real estate does not provide the necessary loan/collateral ratio, movable property may be used as additional collateral. Moreover, in the case of collateral of real estate and movable property, the share of movable property in the calculation of the total loan/collateral ratio cannot exceed 20%.
By decision of the Credit Committee, other security measures may also be envisaged.
In the case of a vehicle as collateral, the production period cannot exceed:
- For cars of Russian production - 5 years,
- For cars of foreign production - 10 years.
Insurance
Motor vehicles are subject to mandatory "Casco" (physical damage and theft) insurance in favor of the Bank, at least in the amount of the loan amount and subject to annual renewal of the insurance contract throughout the entire loan term.
The insurance is carried out by the customer.
Loan/Collateral maximum value
According to Appendix 1
Valuation of Collateral
The collateral is subject to valuation by an independent property valuation agency cooperating with the Bank and/or an employee of the Bank, depending on the loan amount.
The valuation by the Bank employee is carried out free of charge.
Claims to Guarantors
An individual (18-65 years old):
who has no current overdue credit obligations;
whose total number of overdue days in the last year shall not exceed 30 days.
At least one of the guarantors shall be the owner of real estate or be provided with a registered salary.
OTHER CONDITIONS
Deadline for making a decision on
granting a loan
Decision on loan application within 5 business days after submission of required documents
Deadline for notification of the decision
Up to 1 business day after decision
Deadline for granting a loan
Up to 1 business day after submission of all required documents and state registration of collateral
Maximum validity period of the decision
30 working days
Moreover, the Bank has the right to refuse to provide a loan if any of the conditions considered essential for making a positive decision to provide a loan have changed.
* The loans provided for under this loan type are provided within the framework of the RA Government’s Resolution No. 1284-L dated July 27, 2023 “On Approval of the Program for Supporting the Development of Greenhouse Farms in the Republic of Armenia” (hereinafter referred to as “the Program”). In case of changes in the terms of the Program, the terms of the RA Government’s Resolution currently in effect shall apply.
** The main goal of the Program is to contribute to increasing the area, production and export volumes of greenhouse farms, increasing the level of product competitiveness, and increasing the income of agricultural entrepreneurs.
The Program promotes the construction of multi-slope (multi-peak) greenhouses.
The main requirements for greenhouse construction are set out in Appendix 2.
The area of each complete greenhouse constructed by each borrower must be 1 ha or more.
There is no limit to the maximum area of a greenhouse constructed by each borrower within the Program.
Within the framework of the program, the borrower must carry out the construction and installation of the greenhouse through one contracting organization (legal entity or private entrepreneur) (except for the case of acquiring the necessary funds for construction and installation, which can be carried out by both the borrower and the contractor), which may involve subcontractors in the fulfillment of its obligations. The borrower must conclude the contract with the contracting organization after concluding the loan agreement.
The costs of construction of the greenhouse incurred by the borrower per 1 square meter cannot exceed the estimated cost limits presented in separate lines of Appendix 3.
The construction of the greenhouse must be completed within a maximum of 18 months from the date of entry into force of the loan agreement.
*** The specified subsidy amounts apply to commercial legal entities that have one founder (participant), shareholder, who is also the director of the specified commercial legal entity, and the latter is 18-35 years old or has reached the age of 63. Moreover, in the specified case, the commercial legal entity must not change the founder (participant) or shareholder of the legal entity during the term of the loan agreement, as well as the founder (participant) of the latter, the shareholder must not alienate the share (shares) or part thereof during the term of the loan agreement.
**** If the borrower is provided with a loan for the same project in stages or under more than one loan agreement (in installments), then each subsequent loan is considered a continuation of the first loan, and the grace periods for repayment of the loan and the principal must correspond to the grace period for repayment of the loan and the principal.
***** During the loan term, grace periods for the payment of the loan principal and interest may be established for a period of up to 3 months per year and changes in the repayment schedule (without changing the loan repayment period) by mutual agreement of the Borrower and the Bank.
ATTENTION: IN THE EVENT OF NON-PERFORMANCE OR INCOMPLETE PERFORMANCE OF YOUR OBLIGATIONS, THE LENDER SHALL, AFTER 3 WORKING DAYS, SUBMIT SUCH DATA TO THE ACRA CREDIT BUREAU AND THE CENTRAL BANK (CB) CREDIT REGISTRY, WHERE YOUR CREDIT HISTORY IS FORMED.
YOU HAVE THE RIGHT TO OBTAIN YOUR CREDIT HISTORY FROM THE CREDIT BUREAU FREE OF CHARGE ONCE A YEAR.
ATTENTION: A POOR CREDIT HISTORY MAY HINDER YOU FROM OBTAINING LOANS IN THE FUTURE.
ATTENTION:LOAN INTEREST IS CALCULATED ON THE BASIS OF THE NOMINAL INTEREST RATE, WHILE THE ANNUAL ACTUAL INTEREST RATE SHOWS HOW MUCH THE LOAN WILL COST IF THE INTEREST AND OTHER PAYMENTS ARE MADE WITHIN THE SPECIFIED PERIOD AND AMOUNTS. THE PROCEDURE FOR CALCULATING THE ANNUAL ACTUAL INTEREST RATE IS POSTED ON THE BANK'S OFFICIAL WEBSITE
You can find detailed information about credit history and credit score here
You can find other loan-related terms and conditions at the following link.