Yerevan, Armenia, April 25, 2003
-- The International Finance Corporation (IFC), the private sector arm of the World Bank Group, today announced its investment in the first privately funded commercial leasing company in Armenia.
In partnership with Agricultural Cooperative Bank of Armenia (ACBA), Ucabail – the leasing arm of the Credit Agricole Group of France, and Lebanese Leasing Company, IFC has established the first leasing company in the country, ACBA Leasing. IFC is providing $270,000 in equity financing and a $2 million loan. The total equity capital of the company is $1 million.
Mr. Edward Nassim, IFC’s Director for Central and Eastern Europe, said, “The establishment of Armenia’s first leasing company will particularly benefit Armenian small and medium sized companies, as these companies often face difficulties in obtaining affordable, long-term bank loans. Leasing is a particularly valuable source of financing for small companies with few assets.”
ACBA is the leading bank in Armenia financing small and medium sized enterprises and is a pioneer in introducing new services to its client. The largest bank in Armenia by the size of its capital ($ 8,3 million), ACBA has the greatest exposure to small and medium businesses in rural areas, and during the last few years has grown into urban areas, as well.
Ucabail is playing a critical role in the establishment of the company as a shareholder of the new company and as a provider of technical assistance, jointly with Credit Agricole Consultants. In addition, Credit Agricole is providing a $1 million loan.
The Lebanese Leasing Company (LLC) was the first of its kind established in Lebanon in January 1995, with the participation of IFC and Ucabail. Its business activities mainly consist of financial leasing of productive goods and equipment. LLC is participating in ACBA Leasing as a shareholder and will bring its know-how and outstanding experience in managing a leasing company in adverse markets.
The creation of ACBA Leasing follows IFC’s technical assistance work including the development of the leasing legislation in Armenia, which was funded by IFC. The Government of the United States, through its Agency for International Development (USAID) is funding a comprehensive program of technical assistance to the newly created company. The technical assistance program is implemented by Development Alternatives, Inc. through its Armenia Agribusiness SME Market Development Project (ASME). Grants worth up to $1.2 million are being provided by ASME to assist ACBA Leasing during its start-up phase.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments, mobilizes capital in international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
