The amount of overdue loans issued by Armenia's commercial banks increased by 8.7% m/m in December to AMD37.8bn (€67.9mn), according to the country's National Statistical Service (NSS). Short-term overdue loans declined by 13.4% m/m to AMD21.3bn (€38.2mn), while long-term overdue loans increased by 63.3% to AMD16.5bn (€29.6mn) during the same period. Meanwhile, total lending in Armenia's banking sector increased by 1.7% m/m to AMD1.9tn (€3.48bn) in December.
The ratio of non-performing loans in Armenia increased throughout 2015,and is believed to have been caused by a drop in remittances from abroad and in trade. Up to 2mn ethnic Armenians are estimated to live and work in Russia, and their remittances are a vital source of income. However, the depreciation of the Russian ruble and the economic decline in Russia have led limited employment opportunities for migrant works and depressed remittances migrant workers sent home, including to Armenia.
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