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Terms
tariffs
Loan Type
Loan (non-revolving credit line)
Borrower
Resident legal entity of the Republic of Armenia, individual entrepreneur
Purpose of the loan
Implementation of energy-efficient (EE) projects
AMD
Minimum amount: 2 000 000 AMD
Maximum amount: 500 000 000 AMD*****
A loan of up to 5 000 000 AMD can be provided to a start-up business
(A business is considered a start-up when the potential borrower has not had any operating business during the previous 6 (six) months)
Annual nominal interest rate on the loan
10․75%
Annual Percentage Rate
11.32-17.58%
Annual interest rate calculated on the unused portion of the credit line
0.5%
Loan Term
12–60 months
0 - 12 months
Requirements for the borrower/lessee
Credit history:
· No loan classification and/or the total number of days of overdue obligations must not exceed 30 days over the last 12 months.
· No outstanding overdue obligations.
Age of the borrower/lessee (individual entrepreneur): 18–65 years.
Repayment method
· Annuity (equal monthly payments covering both principal and interest).
· Differentiated (equal monthly principal payments plus monthly interest payments).
· Customized payment schedule based on the specific nature of the business.
Repayment method: at the customer's discretion.
Loan application review fee
Applicable when the energy audit is conducted by R2E2:
· 165,000 AMD (if the energy audit is conducted within 1 working day),
· 330,000 AMD (if the energy audit is conducted within 2 working days),
· 495,000 AMD (if the energy audit is conducted within 3 working days).
Loan origination and servicing fee
none
0.1% per day
0.13% per day
Penalty for early repayment of the loan
In case of early repayment of the loan, a penalty of 5% of the amount repaid early is applied.
Applicable to loans with a contractual amount of AMD 5,000,001 and more.
In case the loan interest rates are subsidized within the framework of the “Targeted Program for Promoting Productivity” (Appendix 1) approved by the RA Government Resolution No. 355-L dated March 26, 2020 “On Approval of Targeted Programs for Modernizing the Economy”, no early repayment penalty is applied.
Real estate and/or
Guarantees:
• For customers that are legal entities — personal guarantees from the business founders and ultimate beneficial owners,
• For individual entrepreneurs — if the ultimate beneficial owner is a third party, a guarantee from the ultimate beneficial owner.
Movable property.
Other forms of collateral may also be required by decision of the Credit Committee.
In the case of pledging a motor vehicle, the manufacturing age must not exceed:
• 5 years for vehicles of Russian origin,
•10 years for vehicles of other countries of origin.
In accordance with Annex 3.
The collateral is subject to valuation by an independent appraisal agency cooperating with the Bank and/or by a Bank employee, depending on the amount of the loan.
The valuation performed by a Bank employee is provided free of charge.
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.
Collateral Valuation
The collateral is subject to valuation by an independent property valuation agency cooperating with the Bank and/or by a Bank employee, depending on the loan amount.
· Valuation performed by a Bank employee is 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.
Timeframe for the decision on granting the loan
A decision regarding the loan application is made within up to 7 working days after the submission of the required documents.
Timeframe for notification of the decision
Up to 1 working day after the decision is made.
Loan processing time
Up to 1 working day after submitting all required documents and completing the state registration of the collateral.
* The loans provided for under this loan type are provided within the framework of the “Promotion of Renewable Energy and Energy Efficiency: Phase 4” loan program implemented by the “German-Armenian Fund” Program Management Office (GAFO) and financed by the KfW Bank of the Federal Republic of Germany (hereinafter referred to as “the Program”).
** At least 50% of the participants (shareholders) of legal entities shall be private owners resident in the Republic of Armenia.
*** The borrower shall meet the criteria for micro, small and medium enterprises. An enterprise is considered micro, small or medium if it meets two of the three criteria (employees, assets and sales) listed below in the International Finance Corporation (IFC) MSME definition (calculated for each reporting period during the 365 days preceding the date of submission of the application)
**** Energy efficient (EE) projects are considered to be:
1. capital investments (purchase of equipment and devices, energy efficient construction) that comply with energy saving measures,
2. purchase of goods that comply with energy saving measures and are considered working capital for the Customer. The purchase of working capital is considered acceptable if:
2.1. they are purchased for the purpose of producing green goods, which will later be sold as energy efficient investments,
2.2. the company purchasing the working capital plans to resell them to legal entities or private entrepreneurs as energy efficient investments to final consumers. For example, if the Customer is engaged in the sale of energy-saving lamps, water heaters or other similar goods, the purchase of these goods can be refinanced within the framework of the Program for the purpose of further sale.
Within the framework of the program, loans may also be granted for the acquisition of working capital that does not comply with energy saving measures, if at least 70% of the loan is directed to the acquisition of fixed assets that comply with energy saving measures, and the acquired working capital is directly related to the energy-efficient investment (for example, if the Customer wants to invest in cake production equipment in the amount of 7 million AMD, then in the case of a loan of 10 million AMD, the remaining 3 million can be used to purchase flour as a raw material).
***** In exceptional cases, if the loan is intended for investments that will be assessed by the RA Central Bank as investments that have a significant positive impact on the RA economy (creating a significant number of jobs, stimulating exports, creating infrastructure, innovative solutions, using renewable energy sources in significant volumes in business, etc.), then the loan amount may reach up to 1,000,000,000 AMD.
****** The interest rates of the loans provided are subject to subsidy within the framework of the “Targeted Program for Productivity Promotion” (Appendix 1) approved by the RA Government Resolution No. 355-L of March 26, 2020 “On Approving Target Programs for the Modernization of the Economy”, subject to the fulfillment of the conditions of the latter, in accordance with the conditions set out in the "Productivity Promotion Loan" loan type operating at the Bank.
In the event that new (unused) machinery and equipment purchased with credit funds and their components are subject to subsidy within the framework of the " Targeted Program for Productivity Promotion" approved by the RA Government's Resolution No. 355-L of March 26, 2020 "On Approval of Targeted Programs for the Modernization of the Economy" and are part of mixed investments made with credit funds, then the general project is financed in stages, by concluding a separate loan agreement for the purchase of subsidized machinery and equipment and its components.
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.