Armenia: How to help your business recover after COVID

September 9, 2021

  • COVID hit my business badly. Where can I get some financing to recover?
  • How do I apply for a bank loan? What are the requirements?
  • I’ve heard about loans, but are grants also available to small companies?
  • The pandemic showed that there is sustainable demand for my business. How can I get knowledge, advice and skills needed to scale up my business?
  • I think exporting to the EU could help my business recover. Where do I start?
  • Are there SMEs like me that got help?
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COVID hit my business badly. Where can I get some financing to recover?

The EU offers financing and guarantees to local financial institutions to unlock lending. This makes it possible for the local lender to provide more affordable financing to SMEs. For instance, you could benefit from lower-interest loans, longer repayment terms, lower collateral requirements, and some loans based in dram instead of foreign currencies. Check what these banks in Armenia have to offer: SEF International, Inecobank, Ararat Bank, ACBA Leasing, ACBA.

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Here are some examples of SME owners who benefited:

Gor Vardanyan, the CEO and co-founder of Chessify, received financial support from the EU for developing an app for chess training, which was an instant hit with 200,000 global downloads a month in both Google Play and the Apple Store, and 500,000 Android and iOS users.

Alvard Davoyan, the farmer and head of Vardablur Women’s Agricultural Cooperative, received support from the EU-Green Agriculture Initiative in Armenia. Most of the usual markets closed due to the pandemic, so the EU helped the cooperative scale up production to supply some of the bigger markets in the region.

How do I apply for a bank loan? What are the requirements?

The EU offers a wide range of options for different types of SMEs. For instance, the EU provides concessionary loans to underserved micro-enterprises and low-income households as well as SMEs in the agri-food sector, retail and other businesses carrying out major energy efficiency investments. There are also attractive opportunities for women-led SMEs.

You can check the conditions for the EU partner banks on the EU4Business website and just call the bank directly. Remember to mention the programme. Very simple!

I’ve heard about loans, but are grants also available to small companies?

Yes, there are!

For instance, the EU Green Agriculture Initiative in Armenia (EU-GAIA) is one of the biggest EU-funded projects in Armenia. If you work in the field of green agriculture, you may get better access to infrastructure, green technologies, good agricultural practices and markets through this grant programme.

If you work in the wine or tourism sector, or in IT/precision engineering, you may benefit from the Innovative Tourism and Technology Development for Armenia (EU ITTD) project, which includes the grant component.

The pandemic showed that there is sustainable demand for my business. How can I get knowledge, advice and skills needed to scale up my business?

To support SMEs like yours, the EU provides considerable funding for business development services in Armenia. The EU assists local business associations and agencies, leading to SME growth. Just check all available business development opportunities, pick the one that suits your needs, and get in touch directly with the organisation!

If you work in the wine or tourism sector, or in IT/precision engineering, you may benefit from the EU4Business project, Innovative Tourism and Technology Development for Armenia (EU ITTD), which offers workshops, training and consultancy services on business expansion and entering new markets.

Women-led businesses may benefit from the EU4Business Women in Business Advisory Programme implemented by the EBRD to access know-how to transform their businesses. This covers a wide range of topics, from the technical knowledge to build a website, for example, or to introduce a quality management system that meets ISO standards, improve energy efficiency or improve Human Resources management. These usually involve working with qualified local consultants with a portion of the net costs reimbursed.

You can even make sure your voice is heard in the national reform process and help your government to better understand issues affecting SMEs like yours! Just check the business enabling environment activities in Armenia supported by the EU.

I think exporting to the EU could help my business recover. Where do I start?

Indeed, that’s a great way to scale up your business! And we have something interesting to offer.

The EU4Business Eastern Partnership Trade Helpdesk will facilitate you in identifying trade obstacles and better understanding regulatory and procedural issues in trading goods and services. Soon, this one-stop-shop online platform will be available that will offer access to trade information (tariffs, non-tariff measures, taxes, trade statistics and procedures).

The EU4Business: Connecting Companies project supports SMEs with exports to EU countries. You can apply for training, coaching and even matchmaking with businesses in the EU.

Are there SMEs like me that got help?

There are more than you can imagine! Between 2019-2020, 15,359 SMEs in Armenia received support through the EU4Business Initiative. Among those, a total of 1,675 entrepreneurs received loans for a total value of €17.1 million under EU programmes that support SMEs. Over 12,500 consultancy services were delivered to SMEs. The income of these supported SMEs rose by 7% in 2020 amounting to almost €23.9 million, and 1,443 new jobs were generated as a result of this support in 2020 alone.

Here are some success stories from SMEs like yours:

Arkady Khachikyan benefited from new opportunities through the EU4Business “Ready to Trade” project, which helped his Satenie company develop a new product line and a brand identity. Satenie was able to build new partnerships during a major European trade show and to go on a study tour to the Republic of South Africa.

Alexan Ter-Minasyan established an eco-friendly guesthouse, the Tui-Tui Eco Lodge in Krashen, with the support of the EU4Business “Innovative Tourism and Technology Development” (ITTD) project. Visitors can rest and relax, eat organic food, go on hiking or skiing tours, and train in the open-air sports area. The Tui-Tui Eco Lodge also provides jobs for locals.

Click here for more success stories to learn about Armenian SMEs that are doing business in many different areas and have benefitted from EU support.

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