Project detail - Ardshinbank CJSC - NASIRA PORTFOLIO


Status: Approved investment
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The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.

Who is our customer

Ardshinbank CJSC (“the bank”) is a new relationship for FMO, and a leading bank in Armenia, ranking 1st in the sector when measured by assets (USD 3.89 bln, 18.5%) and 2nd by net loan portfolio (USD 1.44 bln, 12.7%). The bank offers a full range of banking services and retains a strong franchise in both Corporates (41% of Gross Loan Portfolio), Retail (48%) and Micro-, Small- and Medium-sized Enterprises (MSME) (11%) customers thanks to its extensive network of 62 branches spanning across the country. It is the only private entity in Armenia with assigned ratings from all three rating agencies: S&P (B+), Moody’s (Ba3) and Fitch (BB-). The bank is privately owned by Mr. Karen Safaryan, who owns close to 99% of the shares of the bank.

What is our funding objective?

The proposed transaction is a USD 20 mln NASIRA Risk Sharing Facility (RSF) with Ardshinbank. NASIRA is a financial program supported by the EU and the Dutch Government. Through its controlled risk environment, the NASIRA RSF will bolster Ardshinbank's endeavors to expand its MSME portfolio. The facility places particular emphasis on empowering Young and Women entrepreneurs by supporting their income generating business activities, thereby aligning with FMO’s goal in Reducing Inequalities. The NASIRA transaction will support Ardshinbank in achieving its strategic goal of growing its MSME customer base.

Why do we fund this investment?

Armenia remains a lower middle-income country, as a vast part of its population (29%) lives below the poverty line. Despite the significant presence of MSMEs in the country, their contribution is only about 25% of the country's GDP and around 19% of employment, as the sector has limited access to credit. Due to this, MSMEs are fundamental to the overall socio-economic development of the country. FMO will be directly sharing the risk of the loan portfolio of MSMEs with Ardshinbank, while 50% of the limit will be geared towards Young and Women entrepreneurs, hence qualifying for a 50% RI Label. As a result, the NASIRA RSF facility will incentivize Ardshinbank to finance the underserved and marginalized communities in Armenia, thus supporting the country's economic development. Lastly, the transaction is additional as there are hardly any alternative products available in the market which offer similar portfolio protection as NASIRA does.

What is the Environmental and Social categorization rationale?

Ardshinbank is categorized as Financial Institutions (FI) A (high risk) in accordance with FMO’s Sustainability Policy. The bank is classified as FI-A E&S risk category given their exposure to high E&S risk sectors (mining, metallurgy, construction, energy projects, etc.) in combination with a high concentration of corporate lending. The Bank's E&S risk profile is not expected to significantly change in the short-term. As a part of the transaction, Ardshinbank is required to apply the EDFI Exclusion List, Armenia’s E&S laws and regulations, the IFC Performance Standards for applicable transactions, and to follow an agreed Environmental and Social Action Plan.

More investments

Date Total FMO financing
4/30/2024 AMD 155.44 MLN
Europe & Central Asia
Financial Institutions
Publication date
Effective date
Total FMO financing
AMD 7227.96 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)