Yerevan, Armenia, August 5, 2020 —IFC, a member of the World Bank Group, is providing a loan of $15 million to Inecobank to boost lending to Armenia’s micro, small, and medium enterprises (MSMEs), helping them address the challenges triggered by the COVID-19 outbreak.
Given the global pandemic, many MSMEs in Armenia face lower revenues, higher costs, supply disruptions, and complicated inventory management. As a result, they need working capital liquidity financing to continue operating, providing vital employment, goods and services, and generating tax revenues. IFC’s loan to Inecobank, its longstanding client in Armenia, is part of its $8 billion fast-track financing for its private sector clients worldwide, to sustain economies and protect jobs during this unprecedented global crisis.
“Since the COVID-19 outbreak we have implemented an individual support system for our MSME clients that have been impacted by the situation,” said Aren Naltakyan, CEO of Inecobank. “In view of this, the cooperation with IFC and provision of funds will confidently support our clients from vulnerable sectors.”
The COVID-19 crisis has prompted a drop in international copper prices — one of Armenia’s largest exports — impacted tourism, disrupted transport connections, and dampened growth prospects in the country’s main trading partners, Russia and Europe. MSMEs, a vital part of Armenia’s economy, contribute approximately 40 percent to the country’s Gross Domestic Product (GDP) and 30 percent to the employment, will need support to overcome the difficulties.
Jan van Bilsen, IFC Regional Manager for the South Caucasus, said: “Based on lessons learned globally, MSMEs are particularly vulnerable to systemic crises. Keeping them solvent is key to preserving jobs and limiting the economic damage. Our financing will help Inecobank’s business with MSMEs sustain operations, recover faster, and create jobs, thereby strengthening their resilience and accelerating economic recovery after the pandemic.”
Since Armenia became an IFC member, IFC has supported projects in the country totaling around $700 million, mainly in energy, the financial sector, property, and manufacturing.
About IFC
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2019, we invested more than $19 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org .
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