MICROCAPITAL BRIEF: Armenia's Small and Medium Business Credit Support Invests $2.6m in European Fund for Southeast Europe's Armenia Local Currency Facility

The European Fund for Southeast Europe (EFSE), a microfinance investment fund incorporated in Luxembourg, recently announced that the Small and Medium Business Credit Support (SMBCS), a subsidiary of the Central Bank of Armenia, will invest EUR 2 million (USD 2.6 million) in EFSE's new Armenia Local Currency Facility. The facility, which is intended to support local-currency lending to small and medium-sized enterprises (SMEs) in the country, remains open to further donor funds from international donor agencies and local institutions.

Monika Beck, Chairperson of the EFSE Investment Committee, said, “Though they form the backbone of the Armenian economy, SMEs do not generate the foreign currency income necessary to meet the foreign currency obligations linked with a long-term foreign currency loan. Thus SMEs bear the full risk in case of devaluation of the local currency against the US dollar in which the loan is denominated. The Central Bank of Armenia therefore provides an....

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