FAQ

What is Panarmenian Bank?

Panarmenian Bank is an enterprise development bank. This is a new type of financial enterprise in Armenia that aims to provide up to 10 years long-term financing for development projects of Armenian competitive and export-oriented private enterprises.


When and how was Panarmenian Bank established?

The idea for establishing Panarmenian Bank dates back to 2007. It arose from the need for capital investment in local enterprises with the long-term disbursement of loans -- especially for the manufacturing of goods and the provision of services -- as their further development was hindered due to long-term financing limitations. 

The objective of establishing the Bank was thoroughly explored for a long time. It was reviewed and discussed by different parties, such as the Armenian government, the Office to the President of Armenia, the Central Bank of Armenia, National Competitiveness Council of Armenia, Business Support Council of Armenia and foreign businessmen and specialists. However, since no such financial enterprise had ever been established in our country, the law “On Panarmenian Bank,” passed in 2008, was initially developed based on the model of a commercial bank.

The continuing internal dialogue about the concept of Panarmenian Bank brought forth the need to adopt changes to the current law.

As a result of further consideration of the law, which was passed on June 23, 2011, the mandate for Panarmenian Bank’s activities was defined and the Bank’s disaffiliation from the government was assured. Furthermore, Panarmenian Bank’s autonomy in lending and investment guided by strict market principles was guaranteed.

As a founder of Panarmenian Bank, the Central Bank of Armenia registered the Bank’s charter in 2009. The Bank was officially opened on September 7, 2011.


What is Panarmenian Bank’s mission?

The mission of Panarmenian Bank is to promote the growth of productivity and efficiency as well as the institution-wide improvement of competitive medium-sized enterprises in the private sector through the long-term funding of development projects in Armenia.

Panarmenian Bank focuses on export-oriented projects that require long-term funding for their activities and successful growth.  


What is the difference between Panarmenian Bank and commercial banks?

As a bank that focuses on enterprise development, Panarmenian Bank operates in a radically different way than traditional commercial banks. It is a new type of financial institution that aims at developing and improving enterprises.

Unlike commercial banks that provide a variety of services to clients having different legal statuses, Panarmenian Bank works only with private medium-sized enterprises, supporting them in implementing investment projects whose long-term funding requirements are not often fulfilled by commercial banks. Panarmenian Bank does not provide bank accounts or credit cards, accept deposits, provide short-term or mortgage loans.   

Thus, Panarmenian Bank does not compete with commercial banks. On the contrary, in addition to its direct lending Panarmenian Bank collaborates with commercial banks to provide joint funding packages, where commercial banks supply relatively short-term working capital while Panarmenian Bank provides relatively long-term financial resources.


Who qualifies as a client of Panarmenian Bank?

Only private medium-sized enterprises that are registered and operate in the Republic of Armenia are eligible to become clients of Panarmenian Bank. Those enterprises should have a competitive product or service, sound financial and credit history, properly developed business plan, and a competent, strong and successful management staff that is willing to make the changes necessary for the enterprise’s development. Companies that do not fully meet the criteria of Panarmenian Bank are also eligible to become clients of the bank if they are willing to make the necessary improvements.

The selection of clients and submitted projects is based on a detailed economic analysis of the enterprises. Panarmenian Bank does not support individual clients.


What services does Panarmenian Bank provide?

Panarmenian Bank provides up to 10 years long-term loans to its clients focused on export oriented enterprise development and increasing their competitiveness as well as modernization, while fostering their transition to a more efficient management culture.


What development prospects does Panarmenian Bank forecast?

As international experience shows, development banks initially aim to provide long-term loans, then make limited, temporary investments in enterprises. Due to the country’s capital market growth, development banks are gradually turning to investment banks in the third or even fourth decade of their activities.

Panarmenian Bank also forecasts transitional changes for the next twenty years. The results of such changes lead to the creation of additional development tools within that period. For example, the Bank may provide limited equity funding during that period by blending with lending operations. Also, in the future Panarmenian Bank can release bonds to attract additional resources so people who cannot directly invest in Armenia, for instance Diaspora representatives, will be able to participate in country development in other ways. At that stage, it will be possible to provide funding for riskier start-up enterprises. However, that is contingent upon whether such enterprises have guaranteed support of an experienced strategic business partner.


What are the implementation principles of Panarmenian Bank’s financial activities?

Panarmenian Bank implements its financial activities strictly in accordance with market and business environment criteria. The Bank does not tolerate state interference or provide funding for government-related projects. Lending and investment decisions are made solely on the basis of deep analysis, transparent evaluation and risk-management procedures.

The principles set by the Laws and Regulations of Panarmenian Bank have vital importance in supporting the Bank’s steady operations. Moreover, guided by such principles it is possible to obtain a sufficient level of solvency and credibility in order to incorporate long-term funds from international financial organizations and development-oriented private sources and issue bonds in the future.


How are Panarmenian Bank’s activities regulated?

The Central Bank of Armenia, in accordance with the legislation of the Republic of Armenia, regulates Panarmenian Bank’s activities.


How can I find out more about loans provided by Panarmenian Bank?

To find additional, detailed information about Panarmenian Bank’s loan funding process, visit our website at http://panarmenianbank.am/?id=330&lang=en

Updated 26 / 03 / 2014 - 14:19