Yerevan, Armenia, October 12, 2010—A
new report commissioned by IFC, a member of the World Bank Group, has identified
steps that the government of Armenia can take to stimulate the leasing
industry, which would in turn support the development of small and medium
The report, produced by the IFC Armenia
Banking Market Development Project at the request of the Ministry of Economy,
found that by discontinuing the use of import value added tax on goods
for leasing purposes, the government would stimulate the expansion of the
leasing industry. Other recommendations concern improvements to the Civil
Code and further promotion of leasing with small and medium enterprises.
Currently at a low level of development
in Armenia as compared to other countries in the region, leasing would
largely help small and medium enterprises, which account for significant
output and employment in the Armenian economy.
“Leasing can support the growth of
small companies, which do not have property to secure bank loans and therefore
find it difficult to access traditional bank finance,“ said Thomas Lubeck,
IFC Regional Head, Caucasus. “This report identifies specific steps that
the government can take to further stimulate the growth of the leasing
IFC supports the development of leasing
in Armenia through a combination of targeted investments and advice. IFC
was a co-founder of ACBA Leasing, Armenia’s first leasing company, investing
equity and providing a long-term senior loan to the company in 2003. Earlier
this year, IFC provided an additional $3 million loan to ACBA Leasing to
help expand access to finance for local small and medium enterprises.
Since Armenia became a member of IFC
in 1995, IFC has invested $87 million in 18 projects across a range of
industries, including financial markets, general manufacturing, energy,
mining, and chemicals. IFC Advisory Services provides advice through projects
focusing on the financial sector, sustainable energy, and regulatory simplification.
In fiscal 2010, IFC achieved its highest level of investments in Armenia,
with $35 million in total commitments for six projects in the financial,
mining, and construction sectors.
IFC Armenia Banking Market Development
Project is run in partnership with the Austrian Development Agency and
the Government of the Netherlands.
IFC, a member of the World Bank Group is the largest development institution
focused on the private sector in developing countries. We create opportunity
for people to escape poverty and improve their lives—by providing financing
to help businesses employ more people and provide essential services, mobilizing
capital from others, and delivering advisory and risk-management services
to ensure sustainable development. In a time of global economic uncertainty,
our new investments climbed to a record $18 billion in fiscal 2010. For
more information, visit www.ifc.org.
For more information about the Netherlands-IFC
Partnership Program, visit: www.minbuza.nl/en/home.
For more information about the Austrian
Development Agency, visit: