Development of sustainable housing market

(Financed by KfW Banking Group)

The Program focuses on the development of a sustainable housing finance market in Armenia. The purpose of the Program is the expansion of sustainable lending to private households by commercial banks and credit organizations for the purpose of either purchase or modernization of housing.

By reducing existing weaknesses of financial institutions and improving housing finance supply (availability and maturity), the Program aims to contribute to the upgrading of the population's living conditions as well as the deepening and broadening of the financial sector.

The target groups are private households which do not have adequate access to housing finance from financial institutions. By building a strong primary housing finance market, the Program should lay the foundations for a successful introduction of a secondary market at a later stage. Therefore, the Program's aim is to improve the structure of the Armenian financial market by providing long term refinance as well as giving additional value through fostering the performance of financial institutions and widening their range of products offered to customers.

In the year 2005, the Governments of the Republic of Armenia and the Federal Republic of Germany agreed in principle on the implementation of the "Development of sustainable housing market" loan program. In December 2007 an agreement was concluded on increasing the volumes of funding and provision of new funding within the framework of the effective contract (phase II), thus increasing the size of the loan program up to EUR 12 million. Thе funding was received fully from KfW bank and by September 2009 had been allotted to the Partner Financial Institutions. Afterwards, the crediting of the PFIs continued at the expense of the revolving fund raised from loan repayments and interest payments, thus ensuring the continuity of the Program.

On April 19, 2010 a new loan agreement was concluded between the RA Central Bank and the KfW bank, on granting a loan of EUR 20 million at a subsidized interest rate within the framework of the "Development of sustainable housing market" loan program of the German-Armenian Fund (phase III).

Тhird phase of the Program is going to be carried out in accordance with a new pattern, through cooperation with the "National Mortgage Company" (NMC) Credit organization. NMC was established by the Government of Armenia in 2009 in order to provide refinancing to local commercial banks and to support the housing finance sector.

Loans are provided in Armenian drams to Armenian nationals residing in the country, with a repayment period of at least 10 years and with the market interest rate, for purchasing apartments or mansions or for reconstruction of those available. The maximum amount of the loan to be granted is set at AMD 12 million.

Partner financial institutions

araratbank ardshinbank armbusinessbank
aeb byblosbank firstmortgagecompany
globalcredit idbank inecobank
nmc en