Government Struggling to Repay Loans from US Armenian Charity

YEREVAN (RFE/RL)–The Armenian government is struggling to fully repay $20 million worth of funds allocated by US-Armenian billionaire Kirk Kerkorian’s Lincy Foundation in 1998 to provide the country’s small and medium-sized businesses cheap credit.

With the January 1 deadline for their return nearing–the Finance and Economy Ministry has turned to law-enforcement agencies for helping it collect some $4.5 million in loans that have yet to be repaid. Most of that money was handled by seven Armenian commercial banks that went bankrupt or were liquidated in recent years.

Lincy’s lending scheme was launched shortly after Kerkorian’s visit to Yerevan more than five years ago. The reclusive Armenian-American tycoon–who has since been Armenia’s single largest Diaspora benefactor–initially committed himself to providing a total of $100 million; however–the scheme’s implementation proved slow and it was decided to confine it to the $20 million limit.

The head of the program’s implementation unit in Yerevan–Robert Harutiunian–believes that it has been a success despite all the difficulties. He said the Lincy loans have financed 49 business projects–helping to create 3,200 new jobs. Most of the businesses that have utilized them are involved in the food processing and light industry–he added.

Harutiunian also expressed confidence in the government’s ability to return the remainder of the sum to Lincy. "We do see prerequisites for getting the money back," he said.

Apart from the low-interest funds–Kerkorian has granted $155 million for various infrastructure projects across Armenia. The bulk of the sum–which makes up nearly one third of the impoverished country’s annual budget–has already been used for the construction of highways–repair of streets–and cultural institutions in Yerevan and rebuilding of thousands of homes in northern Armenia devastated by the 1988 earthquake.

Authors

Discussion Policy

Comments are welcomed and encouraged. Though you are fully responsible for the content you post, comments that include profanity, personal attacks or other inappropriate material will not be permitted. Asbarez reserves the right to block users who violate any of our posting standards and policies.

*

Top