The interest rate of loans for small and medium-sized enterprises remains high, the SMEs cannot breathe while the driving force of economy is SME business too. Why the interest rates do not fall in our country, to the question of Aravot, Samson Grigoryan, the responsible for “SME Cooperation Association”, replies that not localized and temporary solutions are required for the small and medium businesses but fundamental.
He is sure that the small- and medium-sized enterprises should enter into a production field, “Today, a very big percentage of small and medium-sized businesses is engaged in trade, only giving a loan does not solve the problem, first of all, there should be an equal platform created for the SMEs to that it should withstand the competition.” Dealing with the representatives of the businesses almost every day, Mr. Grigoryan opines that the interest rates on loans in our country, particularly for SMEs, is extremely high, and no matter how the government is trying to take steps to reduce it and support the businesses, however, the business cannot register growth with such high percentage.
“As of the conditions of 6-7 months ago, at best the loan in dollars was 16% and in AMD – 22%, now, very lately, the Central Bank has lowered the interest rate on re-loans and it is possible to further go down up to 10 percent. But it is also high for the small- and medium-size businesses. Significant steps must be taken rather than temporary solutions, local issues, the solution should be found in general.”
As Samson Grigoryan said, the loans, of course, play a big role but when there is no competition in the field of SMEs, the businesses cannot repay the loans by these high interest rates, “While there is no competition in the SME sector as the monopolies continue to operate, they are not eliminated, some small steps are being taken but I would not say that the results are there. The nature of Armenians is such that if there is a profit, he will definitely be in this industry, therefore, I do not think that today no one is interested in the import of products that exist in the field of monopoly. When we will have a fully liberalized economy and normal rates of interest for loans then that the small and medium-size business will breathe. The whole world already speaks about 2-3%, in our country, the loan in dollars is issued by 11%. The government was headed in one way that through the SME DNC, they tried to subsidize and lower the interest rates but in that case, too, it seems that they did not succeed because many loans were taken for the businesses that do not bring success, and today, SME DNC is bearing responsibility”.
Samson Grigoryan opines that we should leave the banks to assess these risks rather than the government enters this field but also give a chance to the banks to facilitate the loan process for the businesses and lower the interest to the maximum.
To the question of when the SME business defending organizations were expressing a concern that several thousands of small and medium business are closed in one year, former Prime Minister Hovik Abrahamyan and his government responsible officials were reversing, saying that it is a normal process: some businesses are closed and new ones are opened. Whether it is normal when the existing business being unable to withstand the tax and loan burden decides to close up, Mr. Grigoryan citing the NSS data for this year said that even the businesses that are operating successfully are closing today and leaving the country because there is no expectation for growing, “Even if they do not regress, anyway, there is not expectation for growing. Business likes stability and it never endures constant fluctuations and strikes, the business cannot be evaluated as follows: well, I have achieves this position and that’s it.”
To our question when our business affairs get worse, even in the case of SMEs, the government officials explain it by international factors but whether the external factors affect our internal market so quickly. For example, the price of petrol become high in the international market, in our country, it immediately goes up the next day but when it becomes cheaper, it does not go down in our country for months with a reasoning that the earlier batch is not fully consumed. “Some businesses are associated with the international markets but if we look at the local one, why does it go back day after day? Well, we choose one international market, sign an agreement that goes to decline, what we should expect from this market, the EaEU is going to a global fall by big steps, and we choose this market,” said Samson Grigoryan in response to the question.
To our observation that the Prime Minister Karen Karapetyan says that no one has held our hand, nobody has limited us to the opportunity to choose another market, and we can easily cooperate with European, Chinese and Iranian markets, Mr. Grigoryan said that we cannot withstand their competition, “Because if we produce here and take to these countries, we will have to sell more expensive, and if we form alliances with these unions, we will advantage like with the EaEU.”
Lusine BUDAGHYAN
