Yerevan, Armenia, October 19, 2017—IFC,
a member of the World Bank Group, is helping Armenia’s Inecobank engage
in interest rate swap transactions, which will help it better manage its
interest rate risk to support access to finance for local businesses.
IFC and Inecobank have signed an International
Swaps and Derivatives Association (ISDA) Master Agreement, which allows
the bank to hedge the U.S.-dollar interest-rate risk on its outstanding
long-term borrowings. The ISDA Master Agreement is the standard document
used to govern over-the-counter derivative transactions.
“This new agreement with IFC will help us
better match our asset and liability positions and increase our ability
to manage our finances effectively,” said Garnik Tadevosyan, Acting Chief
Executive Officer of Inecobank. “We will use this new risk management
tool to fix interest rates on our long-term borrowings at favorable levels
to create better value propositions for our clients.”
According to the
World Economic Forum’s Global Competitiveness Index 2016-2017,
access to finance represents the biggest obstacle to doing business in
Armenia. As well as helping Inecobank hedge its interest rate risk, the
new tool will improve access to long-term finance for its clients, helping
them grow and create jobs.
“The agreement with Inecobank, our long-time
partner, is part of our strategy to help banks improve their risk management
capacity and introduce innovative products that can benefit their clients,”
said Jan van Bilsen, IFC Regional Manager for the South Caucasus.
Armenia became an IFC member in 1995. Since then, IFC has provided over
$480 million, including nearly $118 million mobilized from other lenders,
to finance 49 projects across a range of sectors, including financial markets,
manufacturing, agribusiness, services, and mining. IFC has also supported
trade transactions worth more than $130 million through its trade finance
program, and implemented advisory projects focused on private sector development.
IFC, a member of the World Bank Group, is
the largest global development institution focused on the private sector
in emerging markets. Working with more than 2,000 businesses worldwide,
we use our capital, expertise, and influence to create markets and opportunities
in developing countries around the world. In FY17, we delivered a record
$19.3 billion in long-term financing for developing countries, leveraging
the power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org
Established in 1996, Inecobank CJSC is a
dynamically developing Bank offering universal services in the financial
services market in Armenia. Goal is to become the premier provider of simple
and efficient banking services to retail, micro and SME Clients in the
developing countries. Inecobank works with almost 30 IFI partners, including
3 equity investors (IFC, DEG, and EBRD), as well as senior lenders such
as ADB, FMO, BSTDB, EFSE, OeEB, OFID, and many others. For more information,