BUSINESS LENDING IN ARMENIA: PATTERNS, TRANSFORMATIONS AND FUTURE DIRECTIONS

Abstract

In recent years, the financial system of the Republic of Armenia has undergone numerous structural changes, driven by both internal economic processes and prevailing macroeconomic conditions. Accordingly, corporate loans have become the main means of financing the real economy and a key driver of production expansion, investment, and job creation.

The banking sector continues to serve as an intermediary in Armenia; through economic recovery, various government support programs, and international instruments, it participates in the projects of Armenian companies' projects.

Despite all the above-mentioned advantages, getting finance may still be a problem for many organisations. High cost of borrowing, need for collateral, credit risk, and restricted ways of raising funds may create problems for businesses, especially for small firms. This becomes even more relevant for startup and innovative firms, which may not have enough collateral and credit history to borrow from banks.