IMF Working Papers

Supporting Sustainable Financing and Access to Finance in Armenia

By Maria Atamanchuk, Kiichi Tokuoka

January 13, 2023

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Format: Chicago

Maria Atamanchuk, and Kiichi Tokuoka. "Supporting Sustainable Financing and Access to Finance in Armenia", IMF Working Papers 2023, 004 (2023), accessed November 7, 2025, https://doi.org/10.5089/9798400218057.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

In Armenia, both external and domestic financing face challenges. Armenia’s share of inward foreign direct investment (FDI) in private external financing has declined significantly over the past decade. Access to domestic finance in Armenia is also moderate and masks important disparities. Against this background, this paper analyses the determinants of inward FDI and examines the impediments to increasing access to domestic finance. The paper confirms empirically that governance-related structural factors have a significant impact on inward FDI. Similar structural factors, informality and poor accounting practices are reported among major challenges for increasing access to finance for firms in Armenia. This paper finds that to improve financing in Armenia include: implementing structural reforms to improve the business environment, maintaining prudent macroeconomic policies, strengthening financial reporting, and improving financial inclusion through reduced informality in the economy.

Subject: Balance of payments, Business environment, Capital inflows, Economic sectors, Financial inclusion, Financial institutions, Financial markets, Foreign direct investment, Loans

Keywords: Access to finance, Armenia's share, Business environment, Capital inflows, Europe, Face challenge, Financial inclusion, Financing in Armenia, Foreign direct investment, Global, Inward FDI, Inward foreign direct investment, Loans, Middle East and Central Asia, Sustainable financing

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