Loan Financing for MSME by KFW Bank

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Loan Financing for MSME by KFW Bank






  • RA resident legal entities and sole proprietors qualifying for SME loans.
  • The results of analysis of borrower’s financial statements must meet the Bank’s requirements.



  • For capital investments and other business activities.
  • Note: the Program aims to enhance MSME liquidity by facilitating their access to loans in national currency. The program is not aimed at refinancing of loans of a specific sector(s). It will finance current business needs (working capital) in various economy sectors and investments (equipment, machinery, enterprise premises, etc.).


Loan limits

  • Loans backed by collateral: AMD 3,000,001 – AMD 160,000,000
  • Loans backed by a surety of at least an individual or legal entity: AMD 1,000,000 – AMD 3,000,000


Disbursement method



Loan period

6 - 60 months 


Grace period for loan principal

In some cases, grace period may be up to 3-6 months


Nominal interest rate per annum

  • Loans with up to a 36-month repayment period – 11%
  • Loans with repayment period from 36  to 60 months – 11.5%
  • Based on a decision of the Bank competent body, the loan interest rate under the Program may be set to equal 10% - 11% for diligent borrower-customers (who actively use bank's various services, ensure non-interest  income and bank account cash turnover, who have signed or intend to sign a cooperation agreement with the Bank (POS, V-POS, payroll projects, etc.)).



  • Real and moveable property,
  • Funds in deposit or current accounts,
  • Standard gold bars or scrap gold,
  • Short-term government bonds or other securities.
  • If appropriate and available, current assets and finished goods (with consideration of the liquidity of other types of collateral or loan-to-value ratio, loan period, customer’s credit history, etc.).
  • Additional condition: Personal sureties of business founders/beneficiary owners are required, besides, the Bank may also request submission of a surety of an individual and/or legal entity.


Acceptable Loan-to-Value  ratio

  • Real property and other fixed assets – up to 70% of the appraised value.
  • Short-term government bonds – up to 95% of nominal value.
  • Other securities – up to 70% of appraised value.
  • Standard gold bars and scrap precious metals – up to 95% of appraised value.
  • Cash (deposit and current accounts) – up to 90%.
  • Working capital – up to 50% of the appraised value.



If appropriate


Surety requirements

  • An RA resident - legal entity, sole proprietor or individual.
  • Absence of past due liabilities, also in relation to issued surety bonds).
  • Absence of loan classifications during the past 12 months, and total number of days past due should not exceed 30.


Prerequisites for loans secured only by surety bonds

  • Absence of loan classifications during the past 12 months, and total number of days past due should not exceed 30.
  • The number of the borrower’s unsecured loans (without the expected loan) should not exceed 5 and their cumulative balance should not exceed AMD  5,000,000 and/or foreign currency equivalent.


Fees and charges

  • Loan application review – 0
  • Loan account service – 0.5% of the loan amount but not less than AMD 20,000 and not more than AMD 100,000.
  • If the loan amount is received in cash, the Bank will charge a cash withdrawal fee according to the Bank’s rates and fees.


State duties and other costs

  • State duty charged by RA competent bodies for notarization and registration of collateral agreement.
  • Appraisal of pledged assets, according to fees and rates by independent appraisal companies cooperating with the Bank.


Additional conditions

  • No refinancing of old loans is envisaged under the Program.

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