At its September 11 meeting, the Armenian government approved a decision to subsidize interest rates on loans used by businesses to procure grapes.
Presenting the measure, Economy Minister Gevork Papoyan said it is intended to ease difficulties in the grape procurement process, which is expected to begin in full about a week from now.
Under the program, the state will provide budget guarantees of up to 50% where collateral is insufficient. At the same time, the guarantee may not exceed the value of products exported in the previous year. This part of the program will run for a limited period, from September 15 to December 30.
For loans issued in 2024 and 2025, participating financial institutions and beneficiaries may, by mutual agreement, introduce additional preferential terms for repayment of principal between September 15 and December 30, 2026. Repayment periods for those loans may be extended by up to 6 months. Each borrower, however, may use this option only for loans issued either in 2024 or in 2025.
In a related decision, the government will also provide budget guarantees to economic operators procuring grapes under the lending program. The guarantee may not exceed 50% of the loan issued by the financial institution and cannot be higher than the value of products exported in the previous year. The minimum budget guarantee has been set at AMD 100 million.
These guarantees may be issued without additional collateral. Repayment of loan principal will first be directed toward obligations secured by state guarantees. The maximum repayment term for the guarantees has been set at 27 months.
According to information provided by economic operators, seven beneficiaries have signed contracts to procure about 80,000 tonnes of grapes worth around AMD 12 billion. Based on this, the total value of applications for budget guarantees to support this year’s procurement campaign is estimated at up to AMD 6 billion.
Beneficiaries must have contracts signed before August 1 and must carry out procurement in cashless form.
During the discussion, Prime Minister Nikol Pashinyan said the Armenian government would continue working on export diversification. He added that, for exports — especially seasonal agricultural products — activity in the tourism sector is also important, as it boosts demand for such goods among visitors.
