Yerevan /Mediamax/. Interview of “BLESS” UCO General Director Hayk Stepanyan to Mediamax News Agency and Banks.am portal##

- We can suppose that the entry of “BLESS” in the market is conditioned by the stable growth of demand for credit services. Nevertheless, maybe there were other motives as well, which allowed you entering the market in the full swing of competitive struggle?

- The decision to set up “BLESS” was made in early 2007, in April of the same year the organization was officially registered. Indeed, the period coincided with the growth of competition tendencies, conditioned, first of all, by the arrival of new players. However, the preliminary study of the credit services market, which was carried out by the representatives of our organization’s initiative group, who had sufficient experience in banking sphere, allowed us getting clearly determined in making the final decision.

According to our assessments, the market is yet open for the entry of new organizations in the light of significant demand for various credit products, and, which is of no less importance, due to the objective demand in increasing the service of the crediting process. From this point of view, we put the main stress on responsiveness of the process to make a decision on crediting and the quality of the customer service.

Already at the initial stage of the work we made sure that our approaches are justified: in a short period of time our customer base was replenished by large borrowers, which earlier used the services of these or those banks and credit organizations.

- What is the volume of credit investments realized since the day of establishment and which one is the most demanded among your products? Do you observe increase of demand for credit services?

- As of today, the organization’s credit investments make about 1bln 800mln AMD, 70% of which represent business-credits, the remaining 30% fall on the share of consumer crediting. This year we carried out active work on providing guarantees as well. In particular, guarantees at the volume of over 3bln AMD were provided to organizations, involved in the spheres of construction and services.

Of course, we register growth of demand for credit products and we believe that the crediting market has not yet reached the level, when the offer might exceed or even get close to the level of demand. In these conditions, the issues of risk assessment and management become more urgent.

There is a quite large group of potential borrowers today, who, being “in the shade”, may introduce certain problems to the crediting process. In the present conditions, the information on the borrower may have official and “unofficial” sides and the possibility that the credit is registered for one borrower, but is used by another person, is not ruled out. Taking this into account, it is especially important to reveal credible information on the borrower and the purposes of credit use.

- Would you, please, present the approaches of “BLESS” concerning business-crediting? Are there branch priorities? Which category of borrowers you accentuate your attention mostly? Do you provide credits for founding business “from scratch”?

- The main target group of “BLESS” is the representatives of small and medium business. According to our assessments, this very category of borrowers, in the process of attracting credit means, most frequently faces various obstacles, to overcome which one needs real support.

In the process of considering credit applications, we do not keep to certain special branch priorities, at the same time taking into account the fact that there are branches with relatively greater level of risk. In any case, we show individual approach to each potential borrower.

We do not rule out the possibility of providing credit means to found new business. However, in that case detail information on the real opportunities of the particular client is extremely important for us: his own investments, marketing skills, business-relations, etc.

- For what purposes may the consumer credits, provided by you, be used?

- First of all I would like to note that there is somewhat distorted understanding of consumer crediting in Armenia today. Many people think that the presence of only one pledge is enough to claim to receive this credit product, and the purpose, for which the credit means will be used, is the personal business of the borrower. If we follow this logic, it will turn out that one can register a consumer credit and use the received means, for instance, for entrepreneurship purposes.

This is why the revelation of the purpose of consumer credit means’ use is an important component while making a decision. If there are irrefutable arguments that the received means will be used to secure the personal needs of the borrower, or the members of his/her family, and the incomes and the offered pledge correspond to the established standard, the client may quite easily claim to receive the given credit product.

The received credit means can be used by the borrower for purposes of acquiring personal property, or can be directed to secure these or those personal needs.

- How is the issue of credit means replenishment decided upon and is the prospect of attracting additional financial recourse considered?

- Today our means are replenished at the expense of investments, made by the founders of “BLESS” UCO and the affiliated legal entities. At the same time, we plan to take up particular steps to attract additional means within the framework of the authorities, registered in normative-legal base.

The recent legislative changes, which allow credit organizations attracting financial means from individuals by means of issuing and placing securities, create additional opportunities to attract means from the internal market.

- Do you plan to establish a branch network?

- Not yet, but we actively work in the regions of Armenia and NKR and we welcome applications, received from there. Today, a tangible part of our crediting portfolio is placed in the regions and I believe that simultaneously with the increase of our presence in the regions, an objective necessity to open branches will appear.

- Recently the establishment of a Union of Credit Organization was announced. What was the necessity to set up such a structure conditioned by, when there is already the Union of Armenian Banks existing?

- In a wide context, banks and credit organizations work in the crediting market, but there are also specific issues. During the preparatory works on establishing the Union, in which the representatives of “BLESS” also participated, the prospect of joint activity within the framework of the Union of Armenian Banks was also discussed among other issues.

But as a result a decision was made, according to which, being a branch structure, the Union of Credit Organization will be able to more efficiently solve specific issues, first of all in the sphere of micro-crediting.

I believe that simultaneously with the expansion of membership of credit organizations and concretization of the activity priorities, the newly-established Union will render real assistance to solving a number of issues, which are in the field of credit organizations’ activity. We also plan to register membership in the given organization.

- Do you consider the possibility of increasing credit interest rates as a preventive measure in conditions of the possible influence of the world crisis on the financial market of the country?

- We follow the developments and believe that they have not influenced the country’s economy enough as to make us reconsider crediting terms. If the increase of interest rates or the decrease of crediting terms becomes an aim in itself, this, first of all, will influence the quality of the issued credits – we will deal with problematic overdue credits.

At the same time, one should note that the market participants have started carrying out a more reserved policy and it is not ruled out that some of them may increase credit rates, but it will be a local process.