YEREVAN (Noyan Tapan)–The Armenian government and the Lincy Foundation signed an agreement on the guidelines of use of the first $10 million of the $250 million donated by Kirk Kerkorian–Deputy Minister of Economy and Finance Edward Mouradian reported. The sum will be used as loans for the development of small and medium-sized business. Use of the remaining $90 million will be determined at a future date.
Mouradian specified the following principles of the given loan program:
–The Lincy Foundation will allocate interest-free credit to the government for three years. The credit will be given in Armenian drams to strengthen the Armenian currency and secure it against the currency market.
–The government will allocate the loans to Armenian banks at a three percent annual interest rate. The banks are authorized to allocate those loans at a 15 percent annual interest rate. The amount of the loans may vary from $100,000 to $1 million–and with the consent of the Lincy Foundation the sum can increase to $2 million.
–The loans will be allocated to Armenian privately-owned enterprises–with at least 51 percent ownership by Armenian residents and a maximum of 20 percent capital investment by foreign agents. The loans will be allocated only to enterprises which produce goods for export and services of higher demand. Those enterprises can also not be involved in the production and sale of guns or illegal drugs. Mouradian pointed out that principles applied for the allocation of loans will follow stipulations set by t
he World Bank-financed Enterprises Development Program. Six Armenian banks are currently included in that program.
In the near future–the government will make a detailed statement regarding this loan program which is likely to begin within two to four months–Mouradian said.
Regarding the remaining $90 million dollars–the deputy minister said that another structure of disbursement may be determined by the end of the year. That sum might be used to encourage foreign investment in Armenia–he said.