The objective of the Targeted Productivity Promotion Program is to provide economic operators with access to affordable financial resources to modernize production capacities and promote the introduction of new technologies in the Republic of Armenia. The Program is regulated by Annex 1 to the Targeted Economic Modernization Program approved by Decision N 355-L of the Government of the Republic of Armenia on March 26, 2020.
maximum 120 months(subsidization period - up to 42 months)
movable and immovable property, agricultural machinery, equipment, other collateral, guarantees of individuals or legal entities
FOR GUARANTORS
If the borrower fails to fulfill their obligations, you will have to make the payments on their behalf, your credit history will deteriorate, and you may lose your property.
You will be provided with copies of the loan and guarantee agreements and the repayment schedule.
Communication will be carried out through the method selected by you.
You will be notified 7 days in advance of any changes to the terms of the agreement.
A reminder regarding the existing obligation will be sent 1 day in advance.
In case of a delay in loan repayment, you will be notified no later than the following day.
THE GUARANTOR HAS THE RIGHT TO:
Request information from the lender at any time regarding the outstanding loan balance.
Recover from the borrower the amounts you have paid toward the loan, as well as any other damages incurred on behalf of the borrower.
Loans are provided to commercial and non-commercial organizations registered and operating in the Republic of Armenia or to individual entrepreneurs,
Business loans are provided to legal entities and individual entrepreneurs that have had continuous business activity during the last 12 months in the construction sector, the last 6 months in the manufacturing sector, or the last 3 months in the trade and services sector,
The loan term is a maximum of 120 months, while the subsidization period is up to 42 months,
The minimum loan amount is AMD 150,000, while the maximum amount depends on the purpose of the loan:
In case of construction or reconstruction of hotel facilities, and purchase of machinery and equipment and their components - AMD 1 billion or the equivalent in foreign currency (at the exchange rate applicable at the time of signing the agreement),
In case of capital construction - 30% of the purchased machinery and equipment,
In case of software for business process digitization and Productivity Consulting - AMD 400 million or the equivalent in foreign currency (at the exchange rate applicable at the time of signing the agreement).
The maximum subsidized loan amount may be five times the amount invested in the statutory capital, but not more than AMD 10 billion, and in case of foreign currency lending, the equivalent of AMD 5 billion. This condition of the Program may be used by economic operators that have invested AMD 200 million or more in statutory capital from January 1, 2021 until the date of submission of the application for support (except for economic operators operating in the “ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY” and “CONSTRUCTION” sectors). At the same time, a reduction in statutory capital is not permitted throughout the entire subsidization period.
Economic operators using the above benefit are required to submit documents to the Bank certifying the replenishment of the statutory capital before signing the loan agreement. In addition, an economic operator that has invested AMD 200 million or more in statutory capital is required, during the year following the signing of the agreement and throughout the subsequent subsidization years, to submit financial statements prepared in accordance with International Financial Reporting Standards, as well as an external audit opinion from an audit organization with a turnover of AMD 400 million or more.
Repayments are set as equal monthly installments or equal principal repayments. In case of a positive decision by the Credit Committee, other schedules for repayment of interest and loan principal may also be established.
The total amount of the loan principal and 12 months’ interest must not exceed 90.91% of the appraised value of the collateral.
The target economic operators of the measure are those operating in the following sectors:
“Manufacturing,”
“Mining and Quarrying,”
“Electricity, Gas, Steam and Air Conditioning Supply,”
“Information and Communication,”
“Construction,”
“Automobile technical maintenance and repair”
“Transportation and Storage,”
“Accommodation” (except for economic operators engaged in accommodation activities within the administrative boundaries of Yerevan),
“Professional, Scientific and Technical Activities,”
“Rental and Leasing,”
“Education,”
“Human Health and Social Work Activities,”
“Creative, Arts and Entertainment Activities.”
For information about the required documents, click here.
The list of documents required for opening customer accounts at Acba bank:
The loan is provided only on a non-cash basis and through bank transfers
The loan is provided for the following purposes:
purchase or import of new (unused) machinery and equipment to be used within the territory of the Republic of Armenia (machinery and equipment and their components),
capital construction by a contractor organization that is a VAT payer, including installation and servicing of machinery and equipment, provided that the economic operator has acquired new (unused) machinery and equipment,
digitization of the company’s business processes and acquisition of digital software or platforms,
engaging consulting services and experts for the purpose of increasing the company’s productivity.
Subsidization procedure
For loans provided for capital construction, software for business process digitization, and productivity consulting, calculation of the interest rate subsidy starts from the date of loan provision,
For loans provided for the acquisition of machinery and equipment and their components, calculation of the interest rate subsidy is carried out from the date of loan provision until the date of signing the documents certifying the delivery of the equipment being acquired. Subsidization during the delivery process is provided for a period of up to 180 days starting from the date of loan provision, while the borrower is responsible for paying interest for any period exceeding 180 days (provided only if the equipment will be delivered within 180 days).
Factors for making a positive decision on the loan application include assessing the customer’s creditworthiness.
Factors for rejecting a loan application include insufficient financial indicators resulting from the analysis, poor credit history, insufficient or lack of required collateral, and non-compliance with the terms of the Program.
The professional opinion of the Business Consultant and the professional opinion of the Credit Committee.
A decision on the loan application is made within 1-20 banking days after the customer submits the application and the required package of documents.
The Bank communicates its decision regarding the loan application to the customer within 1 banking day after the loan application has been reviewed.
The loan is provided within 3 banking days after the customer submits the complete package of documents required for lending and the collateral process has been completed.
In the case of loans provided in foreign currency, changes in the foreign exchange rate may affect loan repayments.
For foreign currency loans, the exchange rate published on the official website of the Central Bank of the Republic of Armenia as of the loan provision date is used as the basis for calculating the Annual Percentage Rate. The Annual Percentage Rate may change depending on changes in the exchange rate published on the official website of the Central Bank of the Republic of Armenia.
The loan may be repaid before the contractual maturity date, in which case the customer pays the interest calculated for the actual term of the loan.
In the event of fluctuations in interest rates on funds raised and placed by the Bank in the financial market and/or changes in the financing rate and/or the existence of such prerequisites and/or non-purposeful use of the loan by the Borrower.
The Bank may unilaterally change the interest rates stipulated by the agreement by notifying the Borrower at least 30 calendar days in advance.
If the loan is provided against collateral in the form of real estate, a vehicle, agricultural or other machinery, equipment, or devices, and the property is appraised at AMD 30 million or more, the property must also be appraised by a qualified independent appraiser cooperating with the Bank.
The loan is processed at the Bank’s Head Office and branches, except for the Komitas, Yeritasardakan, Opera, Teryan, Shinararner, Homplex Mall, Gyumri, Ani, Ashtarak, and Aragats branches. The complete list of the Bank’s branches is available here.
Loan repayments are made in the following order (in case of repayment of overdue obligations:
Penalty/fine
Interest
Principal amount
The following payments may be made by the customer for lending:
Real estate appraisal service fee - AMD 5,000 and more, depending on the area and type of the property,
Notary service fee - AMD 3,000-15,000,
Fee for the registration certificate of the right to pledge real estate - AMD 2,000-25,000,
Fee for a unified statement (regarding restrictions on real estate) - AMD 10,000,
Fees related to pledging other property - AMD 2,000-10,000,
All fees are included in the calculation of the Annual Percentage Rate.
During the term of the Agreement, the loan account statement and other information that must be provided under the legislation of the Republic of Armenia are provided free of charge. Statements that are not mandatory under the legislation of the Republic of Armenia and duplicate statements are provided as follows:
for a period of up to 6 months (inclusive) - free of charge,
for a period of more than 6 months and up to 12 months (inclusive) - AMD 2,000 (including VAT),
for a period exceeding 1 year - AMD 3,000 (including VAT),
Information on the loan may be provided in the form of a statement as required:
on the business day following submission of the application - AMD 5,000; when applying through the acba digital system - AMD 3,000 (including VAT),
on the same business day, within 1 hour - AMD 7,000; when applying through the acba digital system - AMD 5,000 (including VAT),
within one to four business days - through the delivery service - AMD 6,000; when applying through the acba digital system - AMD 4,000 (including VAT).
See below:
Business Loan Calculator
In case the Borrower fails to fulfill their obligations on time, applicable penalties
A penalty of 0.13% is calculated for each overdue day.
Qualified independent appraisal companies cooperating with the Bank
Example of loan interest calculation:
Loan amount - AMD 20,000,000
Loan interest rate - 15 %
Subsidized loan interest rate - 6%
Non-subsidized loan interest rate - 9%
Loan term - 24 months
Daily interest will be: Loan amount (outstanding balance) × Loan interest rate / 365 = (20,000,000 × 15 % / 365) = AMD 8219․17.
Daily interest payable by the customer = (20,000,000 × 9 % / 365) = AMD 4,931.5.
The subsidized and non-subsidized interest on the loan are calculated based on the outstanding loan balance. The customer is required to pay the non-subsidized interest.
ATTENTION: LOAN INTEREST IS CALCULATED BASED ON THE NOMINAL INTEREST RATE. THE ANNUAL PERCENTAGE RATE SHOWS HOW MUCH THE LOAN WILL COST YOU, INCLUDING INTEREST AND ALL MANDATORY PAYMENTS FOR THE PROVISION AND SERVICING OF THE LOAN, IF MADE WITHIN THE ESTABLISHED TERMS AND AMOUNTS. THE PROCEDURE FOR CALCULATING THE ANNUAL PERCENTAGE RATE CAN BE FOUND HERE.
Foreclosure of Collateral
PLEDGED PROPERTY MAY BE FORECLOSED IF THE BORROWER FAILS TO MAKE INTEREST AND LOAN PRINCIPAL PAYMENTS ON TIME. IF THE VALUE OF THE COLLATERAL IS INSUFFICIENT, THE BORROWER’S OBLIGATIONS WILL BE REPAID FROM THE BORROWER’S OTHER PROPERTY.
Information Provided to the Credit Registry
ATTENTION: IF YOU FAIL TO FULFILL OR IMPROPERLY FULFILL YOUR OBLIGATION, THE LENDER WILL SEND THE DATA TO A CREDIT BUREAU AFTER 3 BUSINESS DAYS, WHERE YOUR CREDIT HISTORY WILL BE 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 PREVENT YOU FROM OBTAINING A LOAN IN THE FUTURE.
YOU HAVE THE RIGHT TO COMMUNICATE WITH THE FINANCIAL ORGANIZATION IN YOUR PREFERRED WAY, BY POST OR ELECTRONICALLY. RECEIVING INFORMATION ELECTRONICALLY IS THE MOST CONVENIENT. IT IS AVAILABLE 24/7, FREE FROM THE RISKS OF LOSING PAPER INFORMATION AND ENSURES CONFIDENTIALITY.
Financial Assistant
ATTENTION: "YOUR FINANCIAL INFORMANT" IS AN ELECTRONIC SYSTEM THAT MAKES IT EASY TO SEARCH FOR, COMPARE, AND CHOOSE THE MOST EFFECTIVE OPTION FOR INDIVIDUALS.
