Agricultural Loans (Rural Area Development)

 

Agricultural loans (Rural Area Development)

Agricultural loans are provided to the farmers and gardeners in RA aimed for;

  • Expansion of the agricultural economy,
  • Establishing fruit orchards and making other investments in agriculture;
  • Construction of greenhouses or refrigeration farms;
  • Acquisition of agricultural equipment and machinery,
  • Procurement of irrigation drip system;
  • Increase cattle number.

For development of farm economy Company set flexible finance service with availability of seasonal repayments of principal amount.

General Terms of Agricultural Loans
Loan Amount Till 60 millions AMD or equivalent USD
Loan Term 1 – 84 months
Annual Nominal Interest Rate 8% – 13%*
Annual Actual Interest Rate 8,23% – 14,8%
loan / collateral ratio 50% – 80% of the pledged property value
Loan provision fee* 0.8%
Other fees Collateral appraisal, re-appraisal, notary registration, state registration and formulation, insurance and other related expenses.
Collateral Real estate, vehicles, equipment, revolving  funds, guarantees and other.
Loan / collateral ratio 50-80% of the pledged property value
Application Fee (Single time) AMD 5,000 fee
Penalties** For overdue main sum or/and interest – 0,1% per day.
The term of the loan application review and decision-making*** Up to 7 working days after receiving all necessary documents

* In case of non-purposeful use of the loan, the creditor may reconsider the nominal interest rate of the loan up to the twice of Central Bank interest settlement rate.

**Also interest rate will be calculated in respect of the overdue amount to the tune of banking estimated percent.

***In case the borrower submits the necessary documents on time.

Repayments of the loan and interests
Loan repayment schedule Equal monthly installments or equal principal amount graphics. Grace periods of principal amount based on seasonality of business.
Premature repayment Premature repayment opportunity without fines and penalties
Interest calculation Annual nominal interest rate  calculated on the outstanding loan balance for a 365-day year
Prepayment/ Loan amount From 0%
Third party service fees
Property appraisal costs AMD 15000-35000
Property insurance fee 0.16-1.5% of loan amount
Joint certificate AMD 10000
Collateral notarization fee AMD 12000
Collateral registration state fee AMD 26000

Regardless of the rates set forth in these Terms, the fees for third-party services may vary by third parties.
Criteria of the loan disbursement approval or denial:
Criteria for a positive decision on loan granting

  • Steady income
  • Appropriate collateral, guarantees
  • Positive credit history
  • Long term work experience

Criteria for a negative decision on loan granting

  • Insufficient income to pay the credit off
  • Customer’s income source can’t be verified or presented income is undocumented
  • Bad credit history, with number of overdue days and classifications or customer’s loan history is overloaded

Attention!

  • In order to search, compare and choose the most effective option for the services offered to individuals, you can refer to the following link: https://www.fininfo.am/finhelper/index.php?type=agricultural
  • You have the right to communicate with the financial company whichever way you prefer: through postal communication or email. the electronic submission of the information is the most convenient option. it is available 27/7, it excludes the risks of losing paper based information and ensures confidentiality.
  • The company can require additional documents or other information from the customer based on the “know your customer” principle, defined by the RA law “on combating money laundering and terrorism financing”.
  • If you get a loan in US dollars, changes in the foreign exchange rate may affect loan repayments.

List of required documents
  1. Copies of passport and social card of creditօr
  2. Reference from municipality about housekeeping
  3. Property documents, list of fixed assets
  4. Borrower's ownership documents, list of fixed assets
  5. Detailed description of loan spending directions
  6. Photos from the farm
  7. Certificate (if available)
  8. Income and expenses (monthly/ in some cases yearly), product range, cost prices and selling prices
  9. Other documents about income (if any)

 

Collateral

  1. Ownership certificates, bases for ownership amendment (Sale agreement , Decision of the executive body)
  2. Passport copies of the property owners
  3. Certificate about absence of restrictions of the collateral
  1. Report on appraisal of real estate
  2. If married – marriage certificate and spouse’s copies of passport and social card.

 

Guarantee

 

  1. Copies of passport and social card of guarantees (for individuals) or

Charter, State registration certificate, passport and social card of director (for entities)

  1. Documents on guarantee’s income base
  2. Documents on guarantee’s ownership base

WARNING
  • IF YOU FAIL TO REPAY THE LOAN AND THE INTEREST IN TIME, THE PLEDGED PROPERTY MAY BE REPOSSESSED. IF THE VALUE OF THE COLLATERAL IS NOT SUFFICIENT TO COLLECT THE DEBT, OTHER ASSETS MAY BE REPOSSESSED TOO.
  • IF THE BORROWER DOES NOT PAY THE INTEREST AND LOAN PRINCIPAL AMOUNTS IN TIME, INFORMATION ABOUT CREDIT HISTORY WILL BE SUBMITTED TO THE CENTRAL BANK OF ARMENIA CREDIT REGISTER AND ACRA CREDIT REPORTING CJSC.

ATTENTION

ATTENTION: LOAN INTEREST RATES ARE CALCULATED BASED ON THE NOMINAL INTEREST RATE. AND THE ACTUAL ANNUAL INTEREST RATE SHOWS HOW MUCH THE LOAN WILL COST YOU IF YOU MAKE THE INTEREST PAYMENTS AND ALL MANDATORY PAYMENTS UNDER THE LOAN PROVISION AND SERVICING LINE WITHIN THE SPECIFIED PERIODS AND MEASURES. THE FORMULA FOR CALCULATING THE ANNUAL ACTUAL INTEREST RATE IS AVAILABLE ON THE WEBSITE

INTEREST RATE CALCULATION EXAMPLE (PDF)

“Finance for everyone” ` www.abcfinance.am  web page’s “Financial helper” system
Updated: 03/01/2024