EBRD and EU unlock $20M loan package for ArmSwissBank to back refugee- and youth-led businesses
What's the deal? The European Bank for Reconstruction and DevelopmentDealroom has a profile for this one. Try Dealroom → (EBRD) and the European UnionDealroom has a profile for this one. Try Dealroom → have partnered to unlock a $20M loan package to ArmSwissBankDealroom has a profile for this one. Try Dealroom →, aimed at expanding access to finance for micro, small and medium-sized enterprises (MSMEs) owned or led by Armenian refugees and young people.
The package, announced on June 6, comprises two $10M loans. The first, made through the EU4Business-EBRD Credit Line, targets refugee-owned firms and businesses integrating displaced people into their workforces. Eligible borrowers can access EU-funded investment grants of up to 35% of their loan, plus advisory support.
The second $10M loan comes under the Youth in Business programme, enabling ArmSwissBank to launch a dedicated product for young entrepreneurs who often struggle to secure funding due to early-stage profiles and limited credit histories. This is the first transaction between the EBRD and ArmSwissBank under Youth in Business.
Why now? Armenia faces mounting economic pressures on its businesses, according to Vassilis Maragos, head of the EU Delegation to Armenia. The loan package aligns with the EU's Resilience and Growth Plan for Armenia, which aims to boost free trade, job creation, and entrepreneurship.
At least 70% of funds under the refugee-focused loan will go towards green technologies, helping businesses upgrade to meet EU standards in workplace safety and resource efficiency. The facility also extends ArmSwissBank's reach to startups lacking capital, collateral, or credit history.
What could go wrong? Lending to early-stage businesses and entrepreneurs without established credit histories carries inherent risk. To manage this, the loan is backed by first-loss risk coverage from the EU's European Fund for Sustainable Development Plus (EFSD+), designed to help partner banks expand lending while optimising capital use.
The success of the programme also depends on whether advisory, mentoring, and non-financial services can effectively help young and refugee entrepreneurs navigate the challenges of building sustainable businesses.
"Through a combination of risk sharing and blending instruments, the EU is working with the EBRD to address financing gaps that often prevent underserved firms from growing, innovating and accessing EU markets," Maragos said.
ArmSwissBank has been an EBRD partner since 2010. The EBRD has invested over €3B in Armenia across more than 245 projects, 86% of which are in the private sector.
The signal: With ArmSwissBank classified as a "breakout" stage institution and the EBRD's €3B-plus portfolio in Armenia overwhelmingly concentrated in the private sector (86%), this deal underscores how development finance is shifting from sovereign lending toward commercially oriented intermediaries that can channel capital to early-stage and underserved entrepreneurs. The blended structure — pairing concessional EU grants and first-loss coverage with market-rate lending — offers a replicable template as displaced populations across the region grow and host economies look to convert humanitarian obligations into productive economic participation.
Read more: EU Neighbours East
