Mr. Asatryan, I would like to ask you to present the current state and developments of the banking system ...

Over the past year, excess liquidity has increased in banks and credit organizations. It was conditioned by the increase of banking capital. Another not less important reason was the economic situation, which supposes the shrinking of the field, one of the manifestations of which is the growing competition in the banking system in terms of credit operations. Today, banks are looking for healthy borrowers who are also implementing appropriate programs to reduce interest rates. Generally we see healthy competition. Though in some cases, of course, there are also elements of not fair competition, for example, when a bank attracts a client of another bank.

And how much has decreased the number of loans?

With the experience of Garni Invest, I can say that the percentage of average monthly operations fell by 3-4% compared to the previous year.

The downward trend should be recovered by systematic tools. Today, there is a surplus of $ 1 billion in excess liquidity in banks. This money can be directed to the economy if systemic reforms are implemented successfully. For example, our courts are overloaded. In case of changes in this direction, I'm sure that the flow of money will go to the economy.

What about the quality of borrowers? Has it changed?

Of course, it has changed. The situation is far from that in the 90s. Today, the borrower is more educated and tries to fully understand what he can do with the attracted loan. It was on the contrary in the past: a borrower came to the bank only to make money, and he didn't know what he would do after that. Today's borrower is much more scrupulous about his credit history, as the story is the most important guarantee in lending. The credit market has narrowed, supply and demand are inadequate.

The figures are as follows: in 2016 assets grew by 14%, which is equivalent to the growth of the loan portfolio. However, capital has grown by 27%, so the growth of assets is not equal to capital growth rate. That is, the pace of growth of money supply stays behind the growth of opportunities. That is the reason why the average interest rates have been significantly reduced over the last 1-1.5 years, for example, the percentage of deposits in foreign currency is 5% in some banks.

And what is the situation with problematic loans?

In 2015-2016 the credit portfolio of financial institutions was "heavily aggravated" by problematic loans. But from the last quarter of 2016 till now certain positive tendencies have been observed. The ratio of private money transfers is important here. Its decline leads to an increase in problem loans in the system, but transfers have increased this year. During the 8-9 months of this year the flow has grown by about 15%. In addition, there are stabilization elements in the economy.

Nevertheless, what should the borrowers do who cannot repay the loan?

Banks make certain offers to each borrower in case of a problematic loan. Of course, there are cases when there is no place for proposals, but in general, banks are trying to be more flexible, applying for loan reissuance.

In many countries, there are special organizations that help reputable borrowers to correct their situation and provide refinancing. Do you think Armenia can take that step?

First of all, I would like to mention that there is a consumer crediting law in Armenia, which is to protect the interests of weak borrowers, and we also have the Financial Ombudsman's Institution, which helps borrowers in certain issues.

As for debt market organizations in Armenia, they can hardly develop, because expectations can are hardly be successful deals. Certainly, assets securitization can also be a good solution, in Armenia it is being tested now.

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