Armenian government to help businesses starting from zero – yet another measure to overcome the consequences of coronavirus
The Armenian government will back bank loans issued to novice businessmen with interesting and promising startup ideas.
This is the 19th anti-crisis stimulus programme geared towards combating the social and economic consequences of the coronavirus.
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Who will get what
The maximum loan amount for startups will be 10,000,000 drams ($20,000 dollars).
“And companies that decide to guide their existing business along the path of innovation and development will also be able to receive a loan of 20,000,000 drams ($40,000 dollars),” reported Economy Minister Tigran Khachatryan.
What is particularly special about this programme, says the minister, is that new businessmen who prove the success and viability of their projects will receive greater financial assistance from the state during the next stage of business development.
One of the conditions for potential participants is a good history of paying back credit and taxes.
The interest rate of the loan is from 7 to 10%. However, new entrepreneurs may be given the opportunity to pay only the principal amount of the loan for the first six months, without interest.
This government support programme will be available first and foremost to organizations in the service sector and the processing industry.
“Our assistance will mainly be directed towards business conducted outside of Yerevan. This is due to the fact that, as a rule, it is difficult for startup businesses to obtain financial resources outside of Yerevan,” said Minister of Economics Khachatryan.
He also announced which sectors will not be given assistance under this programme. This includes services in the financial and gaming sectors, as well as retail.
Other Armenian anti-crisis programmes
The Armenian government has already announced 18 other stimulus programmes. Seven of them are aimed towards the economy and provide assistance in the agricultural, tourism, small and mid-sized business, microbusiness and information technology sectors.
The other 11 programmes provide social assistance to the most vulnerable social groups, namely parents of minors who lost their jobs during the state of emergency.
Experts have criticized some of the economic programmes. They believe that the government first needed to calculate what benefit these measures could bring to the overall GDP, and only then could they identify the sectors of the economy most in need of help. They believe that the programmes are not effective enough precisely because they were not fully thought out.
The prime minister himself is generally satisfied with the anti-crisis programs. At his last press conference, Nikol Pashinyan said:
“Within the framework of these programs, as of May 16, we gave out 84,400,000,000 drams [about 175,000,000 dollars] which were used by 48,400 companies and about 1,100,000 individuals.”