Today, the banking system has entered a phase where digital solutions and speed are no longer the only priorities for customers; strategic partnership with their bank has become paramount.

Onik Chichyan, Deputy CEO for Corporate and Retail Business at Armeconombank spoke about he evolution of the Armenian credit market, the strategic tools the bank employs to mitigate potential risks, and the projected development trends for the near future.

What do businesses prioritize today when choosing a bank? Is the interest rate the sole deciding factor, or have other circumstances gained importance?

In reality, the process of choosing a bank has become multi-layered. While interest rates certainly remain a key factor, they are no longer the only - and often not even the primary - decider. Our experience shows that in today’s business world, the highest value is placed on:

Speed of Service: In business, time is money. Tight deadlines for loan approval and disbursement are often more critical than a marginal difference in interest rates.

Flexibility: We see a demand for terms tailored to specific business needs, whether through individualized repayment schedules or a diverse range of collateral options.

Personalized Approach and Advisory: Today’s entrepreneurs expect more than just financing; they seek professional support and expert solutions that contribute to business growth.

In short, the traditional perception of a bank has shifted. We are no longer merely a lender; we are a strategic partner standing by the business at every stage of its development.

Speaking of partnership, we must address security. What are the primary risks in corporate lending today, and how does the bank maintain the balance between supporting businesses and applying rigorous creditworthiness assessments?

This is perhaps the most responsible aspect of banking. In today’s volatile economic environment, corporate risks are multifaceted. We categorize them into several key areas: market fluctuations (currency and demand shifts), instability in customer cash flows, and, of course, external economic shocks.

To mitigate these risks and maintain a healthy credit portfolio, we employ a comprehensive approach. First and foremost, we conduct deep-dive analysis. When assessing creditworthiness, we do not limit ourselves to financial statements. We analyze the stability of the business model, forecast cash flows, and evaluate the growth prospects of the specific industry.

We utilize a modern toolkit where decision-making is rooted in credit scoring systems and regular stress testing. This allows us to understand how a business will perform under various economic scenarios. Furthermore, we engage in continuous portfolio diversification and 24/7 monitoring, enabling us to anticipate issues at their earliest stages. Our goal is not just to provide a loan, but to ensure that the financing helps the business grow rather than becoming an additional burden.

What are Armeconombank sectoral priorities, and how do they align with Armenia’s economic development trends?

As a key player in the banking sector, Armeconombank’s priorities are naturally aligned with Armenia’s national economic development strategy. We focus on sectors that ensure long-term growth and competitiveness: manufacturing and processing, agriculture, IT and innovation, and energy - particularly the development of renewable energy sources.

At the heart of all this is SME lending. Small and Medium Enterprises are the backbone of our economy; they provide the bulk of employment and possess the highest growth potential. By supporting SMEs, we contribute to the country’s overall economic stability.

Promoting women's entrepreneurship and financing "green" projects are also vital to us. To develop these forward-looking areas, we utilize a wide arsenal of tools, ranging from preferential interest rates to guarantee mechanisms and financial literacy programs. In this regard, I want to emphasize our cooperation with prestigious international partners such as the European Bank for Reconstruction and Development (EBRD) and the Black Sea Trade and Development Bank (BSTDB). We are truly proud to make global best practices and financial resources accessible to our customers.

Shifting to the retail market, what are the bank’s priorities in retail lending? How is digitalization transforming this process?

In retail lending, our main priority is ensuring maximum convenience and accessibility for the customer. Digitalization has radically changed lending for individuals, moving it from bank branches directly to the customer’s smartphone. Thanks to automated systems, credit services are now available 24/7. Moreover, loan application decisions are made within minutes.

As a result, the need to physically visit a bank has been minimized. This has also allowed us to reduce operational costs, which in turn enables us to offer more competitive and favorable interest rates to our clients. Ultimately, our goal is to be a reliable digital companion for every customer.

In summary, what is Armeconombank’s vision for the development of the credit market in the coming years?

The Armenian credit market is currently in an exciting phase of transformation. We see the market evolving in four main directions:

The advanced development of digital platforms and innovation.

A hyper-personalized approach to provide specific solutions for businesses and individuals.

Armeconombank’s development vision is based on balance: strengthening the trust we have earned over the years while continuing to implement cutting-edge technologies. By prioritizing responsible lending, we do not aim merely to increase numbers; our goal is for every loan provided to be well-founded and to truly contribute to the well-being of our customers.

Armeconombank is supervised by the Central Bank of Armenia

Source: https://news.am/en/news/1037627