YEREVAN. - The pledges of political parties to reduce the interest rate on credit are not realistic, Executive Director of the Union of Banks of Armenia, Seyran Sargsyan, said on Saturday at a round table discussion organized by Alternativa analytical center.
According to him, the deputy candidates promise to ensure 3-4 percent interest rate in credit but it is unclear where they will get such cheap resources if money is borrowed from international organization at 6-7 percent. If the margin of local banks is added to this without considering their operating expenses, the figure will make up 9-10 percent.
In Sargsyan’s words, the profitability of the bank system in terms of percentage transactions and asset recovery made up 3.1 and 0.5 percent respectively in 2016. Consequently, three banks ended the year at a loss.
He also added that the Government subsidizes the farmers’ loans but very small amount of money is allocated for this purposes, this being insufficient for everyone. The portfolio of agricultural loans in Armenia constitutes $312 million, only 1 billion 163 million AMD ($2.4 million) being allocated from the state budget for the subsidies of percentage rates.