Armenian Economy Development Bank OJSC
Status: Completed investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Armeconombank (“AEB”) in the Republic of Armenia is a top-10 Armenian mid-sized universal bank with a focus on MSME/Retail. AEB reports Total Assets ~USD 430m, Equity USD 69m and RoE 6.9%. With ~873 staff, AEB operates in the top-5 banking network in the country, with 51 branches. FMO has partnered with AEB previously, between 2010 and Dec-2013.
What is our funding objective?
The new 5-year senior unsecured loan of up to USD 20 million, will be fully used to finance eligible sub-loans under FMO’s Reducing Inequalities label. The purpose of the loan is to finance Micro clients and Youth/Women SME customers of AEB. This will contribute to SDG 10 (Reducing Inequalities).
Why do we fund this investment?
FMO's loan will be used by AEB to finance their Micro, Small and Medium Enterprises (MSME) portfolio. MSME are the core of the Armenian economy. The private sector in Armenia is dominated by MSME’s, making up about 98% of total registered enterprises. However, they contribute only for ~25% of GDP and ~33% of employment (source: EIB). Armenia ranks #97 out of 144 countries in the 2017 global gender report of the World Economic Forum. Access to credit remains critical for further development of the MSME segment. More specifically, the loan proceeds will be used to finance a combination of Micro clients and eligible women/youth clients of AEB (contributing to SDGs 5, 8 and 10). In turn, this supports job creation and maintenance in a Low to Middle Income Country (LMIC) where 12% of the population live below the poverty line (Worldbank, $3.2/day poverty line) and unemployment rate is ~18% (39% for youth).
What is the Environmental and Social categorization rationale?
The project has been categorised as Category C in accordance with FMO’s Sustainability Policy. The Project’s activities are deemed to have minimal or no adverse environmental and social risks and/or impacts. As part of the Project, the bank will be required to apply the EDFI Exclusion List and (Country) E&S laws and regulations.
More investments
| Date | Total FMO financing |
|---|---|
| 5/5/2020 | USD 10.00 MLN |
| 5/5/2020 | EUR 5.00 MLN |
| 6/8/2021 | USD 5.00 MLN |
| 3/6/2024 | USD 30.00 MLN |
- Website customer/investment
- http://www.aeb.am
- Region
- Europe & Central Asia
- Country
- Armenia
- Sector
- Financial Institutions
- Effective date
- 5/15/2019
- End date
- 8/13/2024
- Total FMO financing
- USD 10.00 MLN
- Funding
- FMO NV
-
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - B