ARARATBANK OJSC
Status: Approved investmentWhy disclosure?
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In case of questions, please contact us at disclosure@fmo.nl
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
ARARATBANK OJSC is a mid-sized universal bank in Armenia focusing on Micro, SME and Retail customers. The bank operates the 5th largest branch network in the country and employs around 1025 staff. Araratbank is an existing client of FMO since 2014 in the area of funding and technical assistance.
What is our funding objective?
The new loan of up to USD 25 million is used to finance eligible Micro, Youth, Women and Agricultural customers of the bank in line with FMO's eligibility criteria, supporting our impact goal of reducing inequalities. The new loan is partly funded by FMO-A and partly by 3rd party investors mandated by FMO Investment Management, which supports our goal to mobilize commercial investor funds.
Why do we fund this investment?
FMO's loan is used by Araratbank 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 ~19% of employment (source: EU4Business report June 2019). 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/agriculture clients of the bank. In turn, this supports job creation and maintenance in a Low to Middle Income Country (LMIC) where ~42% of the population live below the poverty line (Worldbank, $5.50/day poverty line) and unemployment rate is ~17% (~35% for youth).
What is the Environmental and Social categorization rationale?
The project has been categorized 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, Araratbank is required to apply the EDFI Exclusion List and (Country) E&S laws and regulations.
More investments
| Date | Total FMO financing |
|---|---|
| 10/22/2019 | USD 10.00 MLN |
| 4/24/2023 | USD 20.00 MLN |
| 8/29/2019 | USD 7.50 MLN |
| 8/29/2019 | USD 10.00 MLN |
| 10/30/2024 | USD 10.00 MLN |
- Website customer/investment
- http://www.araratbank.am
- Region
- Europe & Central Asia
- Country
- Armenia
- Sector
- Financial Institutions
- Publication date
- 3/25/2021
- Effective date
- 5/17/2021
- Total FMO financing
- USD 25.00 MLN
- Funding
- FMO NV
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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) - C