Edik Baghdasaryan

Banks are Victimizing Armenia’s Villagers; Does Anyone Care?

For the past few issues, we have been presenting our readers stories of individuals who have taken out bank loans, mainly for agricultural purposes, and the financial mess they have wound up in. We have stressed that the loan system is such that rural residents are facing a credit crisis and that many are forced to sell off their worldly possessions to pay back these loans, granted as high interest rates and in dollars. Villagers are losing their homes, their land and, consequently, their faith in the government. This loss of faith is the most damaging and has forced many to seek their fortunes outside of Armenia. Today, the Armenian courts are full of cases in which banks have taken individuals to court seeking the seizure of property for non-payment of loans. The destinies of real people are at stake here. After travelling to various rural areas in Armenia, it has become woefully evident that local residents who have taken out bank loans now find themselves in a veritable financial spider’s web which is difficult to get out of. The only practical recourse is to sell off what they can and then leave the country. The banks and other lending institutions operate according to a ruthless usury system in which the hapless villager is there to be exploited. Government officials from the president on down, the parliament and political parties, all seem to have more urgent issues to attend to – Armenian-Turkish relations, Obama, Medvedev, Sarkozy, Erdogan, et al. What chance does the average Armenian village have when stacked up against such notables? The country is constructing regional centers in all fields; financial, health, education. We are busy concocting a plethora of pan-national, intra-national and universal programs with such grandiose names as “Come Home”, etc. No one on high seems willing or so inclined to come off their lofty perch and actually trod the length and breadth of the country, through the rural communities of Armenia, the backbone of the nation. We’ve been trying to break down certain barriers for the past few months. The RoA Central Banks argues that the loan system is legally regulated and that it cannot do anything. But I say that the Bank also writes and applies the law. If the legislature needs your input you are at the ready to push through changes in the space of a few hours. We have met with dozens of Armenian MP’s, presented the reality on the ground to them.  Their reaction is to assume a serious tone and grave face and reply – Yes, it’s a very important issue that needs to be addressed. And they raise the issue. Various government officials are heard to say – How has it happened that those credit agencies and the banks have escaped being monitored? It’s not possible. It’s the responsibility of the Central Bank. We have presented the facts. But what’s the use? It’s impossible to crack the wall of indifference, of uncaring. You would think, however, there would be just one person in this country who could explain why villagers are hit with 30% interest rates when the banks get the money at 24%. Is there anyone out there able to justify why the banks should be allowed to reap super profits by swindling Armenia’s rural residents? All these personal accounts of credit victims that Hetq has published only go to show how the government has been “assisting” Armenia’s villagers and “developing” the country’s agricultural sector. The only result that we can see is that more people are being deprived of their land and are forced to leave Armenia, many for good. Then again, was this the plan all along?