Credit Conditions for Farms and SMEs will be softened: the Government approved the Decision 

The Executive approved the Government’s Legislative Initiative on Draft Laws On Amendments to the RA Law on Consumer Crediting and a number of Related RA Laws. Acting Finance Minister Atom Janjughazyan noted that the aim of the amendments is to mitigate the credit risks of rural economies and SMEs. According to him, today the credit portfolio of agricultural farms engaged in agriculture makes about 217 billion AMD. As a result of the adoption of the draft, the credit relations in agriculture and SMEs will be legislatively regulated, borrowers’ rights and creditors’ commitments will be determined, the minimum requirements included in loan agreements will be determined, namely, the requirement to reflect the loan actual annual interest rate in loan agreements, which will enable the borrower who lacks necessary financial literacy to enjoy actually the lowest annual interest rates, really understand the expectation of the amount of actual full expenditure, and hence to take a profitable decision or refuse to take a loan at a given interest rate. The draft also addresses the communication rules with the consumer. It is recommended that the transfer of the information provided by the creditor to consumers in the territory of the creditor would be only an alternative option. Even if the recipient chooses the option of receiving the information in the creditor’s territory, creditors are obliged to provide mandatory submission information via post, email or other option to the credit recipient.

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