The government will provide financial assistance to insolvent borrowers starting from February 1
To remove individuals with insolvent loans from informal employment and restore their economic activity, the state will launch a program starting February 1, 2025. The Ministry of Labor and Social Affairs published a video about this.
If a citizen has credit obligations, and the total principal amount of all loans is less than 1 million AMD at the time of application, and those loans have been classified as insolvent for at least 3 years, the state is ready to assist by redirecting the income tax generated from the salary towards loan repayment. A mandatory condition for applying to the program is having registered employment. The amount of assistance will be equal to the amount of the income tax calculated from the salary and will be directed towards the repayment of the beneficiary’s insolvent loan.
Financial support will be provided for a maximum period of 24 months, starting from the first day of the month following the date of becoming a beneficiary.
According to the Central Bank’s information, as of October 1, 2024, the number of individuals with insolvent loans is around 341,000. Their total debt amounts to approximately 642 billion AMD (which was 525 billion in April 2023). Among them, less than 20% have formal employment, while the rest either do not have a job or are in informal employment. 76% of them earn a monthly salary of less than 150,000 AMD, and 60% earn less than the minimum wage, with the average salary being about 145,000 AMD.
Most of the insolvent borrowers are in informal employment, and some of them are registered as low-income families in the Social Assistance System and receive benefits from the government. The total debt of these 341,000 individuals is about 642 billion AMD (over 1.6 billion USD).