Armenia’s banking sector was quick to respond to the global pandemic caused by COVID-19, Mher Abrahamyan, Chairman of the Union of Banks of Armenia, said today.

Armenia’s Central Bank and creditor organizations teamed up to create mechanisms for borrowers, and to avoid deterioration of credit due to a failure to make payments.

According to Abrahamyan, the Central Bank, in particular, introduced some regulatory changes and applied a set of tools that allowed commercial banks to announce credit holidays, also known as payment extensions, for customers.

“As of May 5, Armenian banks provided credit holidays or otherwise revised around 700 thousand loans of about 400 thousand individuals worth more than 500 billion drams ($1.02 billion), as well as about 13 thousand loans of more than 10 thousand legal entities worth more than 520 billion drams ($1.06 billion),” he said.

Abrahamyan also noted that Armenian banks are actively involved in the implementation of government-designed anti-crisis programs, ensuring the availability of funds provided by the government.

“Let’s not forget that the banking system, as a driving force of the economy, did not stop working for a second; great resources were utilized to ensure the safety of both employees and customers,” he stressed.

According to Abrahamyan, in addition to government programs, banks also continue lending to the economy with their own funds.

“I’ll cite several indicators that also testify to this: in the first quarter of 2020, the volume of loans provided by Armenian banks to the economy grew by about 2.3%, exceeding 3.5 trillion drams ($7.16 billion USD). The total capital of commercial banks over the same period increased by about 1.5%, amounting to more than 836 billion drams,” he said.

The Armenian government, in general, has approved 18 programs to counteract the economic consequences of COVID-19. Eight are designed to support agriculture, tourism, small to mid-size enterprise, microbusiness, IT sector and other industries and the rest – to citizens of various categories.

A 30-day state of emergency to curb the spread of Coronavirus was declared in Armenia on March 16 and physical restrictions in public spaces were imposed on citizens. The government also mandated closure of certain non-essential businesses. On April 13, the government extended the state of emergency for another month and on May 4,  lifted the ban on almost all types of economic activity and physical activity of citizens with the exception of public transit. On May 14, the government again extended the state of emergency for another 30 days.

Deputy Prime Minister Tigran Avinyan said today that despite the extension, public transportation, preschools, trading centers and gyms,  will reopen on May 18, but wearing masks will continue to be mandated in public.

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