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Who is our client

Armeconombank (“AEB”) in the Republic of Armenia is a top-10 Armenian mid-sized universal bank with a focus on MSME/Retail. AEB reports Total Assets ~USD 573m, Equity USD 85m and RoA 1%. FMO has partnered with AEB previously, between 2010 and Dec-2013 and is an existing client again since early 2019.

Funding objective

The loan agreement consist of a EUR 5 million and a USD 10 million tranche. The attracted funding will be used for Green and Reducing Inequalities projects: - 1/3rd will be used to finance "green" projects of the bank which are in compliance with FMO's Green Master List. - 2/3rd will be used to finance eligible Micro, Youth, Women and Agriculture customers of the bank in line with FMO's eligibility criteria, supporting our impact goal of reducing inequalities.

Why we fund this project

Green and Reducing Inequalities is at the heart of FMO’s strategy. FMO's loan will be used for 2/3rd (approx. USD 10.3 million) by AEB to finance their Micro, Small and Medium Enterprises (MSME) portfolio. MSME are the core of the Armenian economy. The private sector in Armenia is dominated by MSME’s, making up about 98% of total registered enterprises. However, they contribute only for ~25% of GDP and ~33% of employment (source: EIB). Access to credit remains critical for further development of the MSME segment. More specifically, the loan proceeds will be used to finance a combination of Micro clients and eligible women/youth/agriculture clients of AEB (contributing to SDGs 5, 8 and 10). In turn, this supports job creation and maintenance in a Low to Middle Income Country (LMIC) where 12% of the population live below the poverty line (Worldbank, $3.2/day poverty line) and unemployment rate is ~18% (39% for youth). FMO's loan will be used for 1/3rd (approx. USD 5.2 million) by AEB to finance eligible green projects supporting FMO's Climate Action target.

Environmental and social rationale

The project has been categorised as Category C in accordance with FMO’s Sustainability Policy. The Project’s activities are deemed to have minimal or no adverse environmental and social risks and/or impacts. As part of the Project, the bank will be required to apply the EDFI Exclusion List and (Country) E&S laws and regulations.

More investments

Date Total FMO financing
5/5/2020 EUR 5.00 MLN
5/17/2019 USD 5.00 MLN
5/15/2019 USD 10.00 MLN
Website client
Europe & Central Asia
Financial Institutions
Signing date
Total FMO financing
USD 10.00 MLN
Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk Environmental & Social Category
(A, B+, B or C)