‘The 21st century brings forth an array of new technologies, and the financial system must lead the way in introducing innovative advancements’, says Hrant Yeghiazaryan, Chief Credit Officer. ‘In Armenia, most financial institutions, including banks and credit organizations, strive to engage customers through digital services like mobile banking. Globally, the financial system has embraced the path of digitalizing products and services. Our primary challenge today is to keep pace,’ he says.

To address this challenge, FCA, in collaboration with DSIK, has developed a new scoring system to enhance its lending processes. This system facilitates a swift assessment of a client’s creditworthiness, allowing for a rapid determination of whether and how financing can be offered. Results will be provided automatically based on a set of mutually defined criterions. Depending on the automated credit decision, the option of a manual eligibility check through the loan officer will still be possible. This system may even offer a more objective evaluation compared to human assessment.

While the implementation of such a system is expected to take several months, it holds the promise of significant time savings. According to Armen Gabrielyan, CEO and President, this advancement will benefit both clients, who will not need to visit branches for smaller agricultural loans, and credit specialists likewise. The organization will be able to channel its internal resources more efficiently, allowing to focus on areas like customer relationship, product development, process control, and monitoring. Approximately 80% of all customers will be able to benefit from the improved approach.

Approximately one-third of Armenia's population, is directly or indirectly engaged in the agricultural sector, with many being small or medium-sized farmers often overlooked by financial institutions. FCA as a credit cooperative aims to provide inclusive financial access to these farmers.

Armen Gabrielyan conceived the idea of establishing a cooperative financing system for farmers back in 2006. 57 like-minded individuals rallied around this concept and received a small grant which has grown since then. With currently over 10,000 members and a capital of approximately 2.5 bln AMD (ca. 6 mln USD),  FCA has become an unparalleled success story in Armenia.

Lending to farmers is no simple task, the CEO says. It demands an intimate understanding of the farmer's work, sometimes even more than the farmers themselves. FCA goes beyond issuing loans; their experts are well versed in the nuances of different regions of the country, understanding the unique characteristics of each village, including climate, sunlight exposure, and agricultural viability. So they can offer advice to farmers and, when necessary, steer them away from detrimental decisions.

FCA and DSIK can proudly look back on a decade of successful partnership. Ani Sargsyan, Chief Financial Officer, names technical support on non-financial matters, capacity building, training and education, and the development of new products as primary areas of cooperation.

This collaboration, she notes, has significantly improved credit processes and organizational efficiency and led to notable advancements within the Environmental, Social, and Governance (ESG) framework. Substantial efforts have been devoted to employee education and training at various levels. Notably, consultations on business ethics and psychology, areas considered complex and challenging to find specialists for in Armenia, received significant support from DSIK.

In November 2023, as the most recent joint activity, DSIK experts conducted a training for 15 of FCA’s middle and senior managers on customer-oriented decision-making and leadership according to the principles of German Sparkassen. Armen Gabrielyan expresses confidence in the organization's promising future. ‘Our activities play a vital role in rural development and for the well-being of our members and farmers. This, in turn, contributes to the growth of our national economy. At the core of our vision stands the idea to promote ‘Cooperation for the benefit of all.’’