The loan agreement will be made between the stock-commercial bank вЂњRespublicaвЂќ and the FMO Dutch Investment Company in early 2006 on allocation of the credit amounting to some $6 million.
The funds are designed for financing trade transactions and development of small and medium entrepreneurship, the bankвЂ™s acting board chairman Asef Zeynalov told Trend. The FMOвЂ™ s credit resources are intended for 5 years at the libor+4% or libor+4,5% annual rate, which will depend on the arrangement under the loan agreement.
Zeynalov finds, there is a large demand in credit resources in the country today. It is profitable for the bank to loan on the account of the outside credits as the bankвЂ™s expenditures by this are by 1-2% lower, than involving funds from the domestic market. It is related to the increase of the interest rates for the deposits, which sometimes reach 15-18% annually under the present situation, in regard to changing the national currency rate; it is much cheaper to borrow from IFI.