YEREVAN. – The European Investment Bank (EIB) and the Central Bank of Armenia (CBA) on Tuesday signed agreement on lending 50 million euro on financing the projects carried out by small and medium-sized companies.

The funds will be allocated to the agro-processing, rural and tourism sectors,r and will be granted to the CBA to be distributed by the financial intermediaries or on-lending to smaller projects, the EIB said in a statement.

EIB Vice-President Wilhelm Molterer, responsible for EIB lending in Armenia, commented: “This is the first EIB loan extended via a Central Bank in the EU’s Eastern Partnership. We are proud of this innovative cooperation, which underpins our engagement in Armenia.”

“This loan to SMEs will complement our long-term fruitful cooperation and increase the EIB’s role in the sustainable development of the Armenian economy,” CBA chairman Arthur Javadyan added.

Even though Armenia’s SMEs account for the majority of businesses in the country, their contribution to GDP, employment, foreign trade and foreign investment remains low. The provision of affordable targeted loans to facilitate the adoption of modern technologies is a precondition for the development of the Armenian SME sector. The loan is in line with the objectives of the EIB’s mandate for lending outside the EU, which focuses on the development of the local private sector, in particular support for SMEs, social and economic infrastructure and climate change mitigation and adaptation.