Swiss Ambassador to Armenia Lukas Gasser: Switzerland will try to contribute to a peaceful settlement of the Nagorno-Karabakh conflict without questioning the established formats such as the OSCE Minsk process
by Gayane Isahakyan
In 2012 there was no favorable environment for development of Small and Medium-Size Enterprises (SME), Tigran Jrbashyan, Director of Ameria Management Advisory said when presenting a new research: Small and Medium-Size Enterprises in Armenia, on 15 October.
He said that SME in the country suffered decline comparing to the previous year. The decline was the steepest for micro-enterprises.
"SME in the regions of Armenia have slipped into depression. Micro-enterprises are extremely vulnerable and sensitive to the overall falling demand in the field," Jrbashyan said.
He links the falling demand in the given segment also with the demographic situation in the country and the migration scales that are extremely high in the regions. In addition, financial products are less accessible to the SME based in the regions. Small and medium-sized enterprises mainly complain of the short terms of loans and the high cost of financial instruments available. Another big problem impeding activity of SME is the high tax burden. This factor affects micro-enterprises, first of all.
"Despite problems, SME are optimistic about their future, unlike micro-enterprises," Jrbashyan said. According to him, the low demand in the field must be recompensed with export.
"The research revealed that the positions of export-oriented companies are much more favorable, as they deal with foreign markets and are less sensitive to the domestic demand," he said.
For his part, Artashes Shaboyan, Senior Analyst at Ameria Management Advisory, presented the results of the search. The share of small enterprises is 5.1% of total SME, he said. The medium-sized and micro enterprises make up 20.2% and 74.7% of total SME, respectively. Shaboya recalled that the enterprises have been classified into micro, small, and medium-sized companies in line with the Law on the State Support to SME. According to Ameria, the survey was conducted among 1003 enterprises, including 655 in Yerevan, 152 in Vanadzor, 144 in Gyumri, and 52 in Dilijan.
According to the research, the share of micro-enterprises in total number of operating SME is 69%, in Gyumri this indicator reaches 80%. In Vanadzor and Dilijan the share of micro-enterprises in total number of SME is over 80%. Most of SMEs in Armenia (47.6%) are engaged in the trade sector. Another 34.4% are in the services sector. 15.5% are industrial enterprises and only 2.2% are construction companies, says the research conducted by Ameria Management Advisory. 55.2% of the companies engaged in the trade sector are micro enterprises.
Ameria studies also the SME-banks relationships and found out that SMEs used mainly loans and money transfers and chose the banks depending of the service quality. Most of the bank loans (69%) provided to SME in 2012 were in terms of the national dram. Loans in terms of USD totaled 31%. Dram loans were provided at the average annual interest of 18.5%. The dram loan size averaged 8.5 mln drams. The USD loans were provided at the annual interest of 14.5%.
The average loan in terms of USD was $130,000.
The company regularly conducts research in various sectors of economy. In 2013 Ameria Management Advisory services presented a New Research on Food Processing Industry in Armenia and the Region, "Industrial Agriculture in Armenia: Development Trends" Research and others.