Many small and medium enterprises (SMEs) in Armenia, particularly those in the industrial sector, are facing serious challenges, according to Karen Martirosyan, Head of Strategic Management Consulting Services at Avenue Consulting Group. Based on internal studies conducted by the firm, Martirosyan highlighted that financial leverage has reached a risky level for many SMEs, and their potential for internal growth remains very low.

 

Martirosyan explained that many businesses are stuck relying heavily on bank loans, which limits their ability to grow. "If these businesses want to demonstrate growth, they either need to reinvest profits from previous operations or seek external financing. However, many have already exhausted their collateral options for additional loans, leaving them in a vulnerable financial position," he said.

 

As a result, some SMEs are now struggling to secure even working capital from commercial banks, forcing them to refinance existing loans by moving from one bank to another in hopes of better terms, such as lower interest rates or extended repayment periods. This situation has placed a significant strain on Armenian SMEs, limiting their opportunities for further development and growth.

Source