Cascade-Credit UCO CJSC and Children of Armenia Fund Partner to Introduce Specially Tailored Loans to Rural Communities

Yerevan, Republic of Armenia, May 14, 2008 - The Children of Armenia Fund (COAF) recently announced its partnership with Cascade-Credit UCO CJSC (Cascade-Credit) introducing a unique loan package tailored to the needs of the communities of the Model Cluster, including Argina, Dalarik, Karakert, Lernagog, Miasnikian and Shenik.

The COAF-Cascade-Credit partnership’s principal goal is to improve access to financial services for the Model Cluster communities and Stimulate Rural Economic Livelihoods (SREL). The COAF-Cascade-Credit partnership is unique in terms of the proposed annual percentage rate (APR) and also shared responsibilities. Part of the loan package’s added value is COAF participating in pre-screening and subsequent monitoring responsibilities.

The partners started the program by first increasing public awareness through presentations in each community, introducing and explaining how this innovative system works. Subsequently, applications were submitted by interested businesses or entrepreneurs from Argina, Dalarik, Karakert, Lernagog, Miasnikian and Shenik communities. Cascade-Credit is providing loans typically ranging from AMD 1,000,000 to AMD 15,000,000 although higher limits are possible. This project is filling the gap between traditional microfinance and domestic banking institutions.

Dr. Arpie G. Balian, COAF Country Director, stated “This partnership is the first of its kind in Armenia and is expected to serve as a model for future financing packages for rural businesses. Public-private partnerships, such as this one, are instrumental in rural development, especially as they are directed to grow the economy.”

Mr. Robert Dira, Cascade-Credit CEO said “A strategic partnership with COAF allows for quick delivery of targeted financial services tailored to support economic development and growth. We are building on COAF’s community development experience and relationships to enhance greater financial impact on the whole of the community’s economy.”

The partners have recorded receipt of 370 applications and have approved 46 to this date. Of the approved list, to date 32 businesses have received loans totaling AMD 85,176,000 (equivalent to US $277,450). These businesses are using the loaned amounts for agricultural development, mainly animal husbandry and farming, acquisition and modernization of agricultural machinery, and even for other ventures.

The comprehensive loan package developed by the partners may be for expanding existing businesses or for starting new ones. The package offers negotiable financing and flexible repayment schedules, with maturity varying between 6 and 84 months and APR starting at 12 %. To encourage rural women to be engaged in entrepreneurial activities, Cascade Credit also is offering a special 11.5% APR for women entrepreneurs. The attractive feature of this loan package is that Cascade-Credit will accept rural real estate as collateral. This new product will have a very positive impact on the rural economy, creating new jobs and increasing the quality of life in the Model Cluster villages. In addition to the loan program, this partnership also offers agricultural leasing to facilitate the acquisition and modernization of agricultural equipment and business renewal. Agricultural leasing ranges between AMD 1,500,000 and AMD 350,000,000, with a minimum 14% APR and 7 years’ maturity.

Cascade-Credit and the Children of Armenia Fund have combined their expertise in crediting and rural development, respectively, crafting new solutions to financing rural businesses. The partners are confident that this initiative will reach beyond traditional subsistence loans and assist the stretched targets in economic growth.

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Cascade-Credit is 100% owned by Cascade Capital Holdings, which in turn is owned by the U.S. based Cafesjian Family Foundation. Cascade Capital Holding’s other companies include Cascade Bank, Cascade Insurance, Cascade Investments and Cascade Consultants.

The Children of Armenia Fund is a non-profit foundation that aims to reduce poverty through the revitalization of rural Armenia and the realization of projects that are instrumental for the revival of communities. With the introduction of its novel approach to clustering in February 2006, COAF is currently implementing the Model Cluster working in six villages in Baghramyan Region of Armavir District. The key components of COAF’s Model Cluster project comprise Infrastructure and Economic Development Programs, and Community Development including Health, Social and Educational Programs.

Contacts:

David Najarian Kelly, PR and Media Coordinator, “Cascade Capital Holdings” CJSC. Tel: 52.04.32, ext. 126; E-mail: david.kelly@cascadebanking.com. www.cascadecapital.am

Inessa Grigoryan, PR and Communications Officer, Children of Armenia Fund. Tel: 52.20.76; E-mail: igrigoryan@coafkids.org. www.coafkids.org