The History of Kamurj In July 1998, with seed capital from the Netherlands-based Consortium on Relief and Development Aid (CORDAID), CRS’s Caucasus Program started a small pilot project working through a local business center to extend credit to microentrepreneurs in Armenia. Within six months, the business center had reached approximately 300 clients in the northern Armenian city of Vanadzor through a village banking methodology. Just four months after it made its first loan, however, the project began to suffer high delinquency rates, with repayment falling from 94 percent in December 1998 to 63 percent by February 1999. After re-evaluating the project, CRS determined that the poor results were caused by a combination of insufficient training of local managers and staff, concentration on products not suitable for a region facing significant economic decline, and a partner organization that really did not share CRS’s vision of specializing in financial services, nor its focus on serving the poorer of Armenia’s economically active people. After considerable debate, CRS applied the lessons learned from this first experience and decided to take over lending operations from the business center. In May 1999, CRS developed a five-year strategy to provide financial services to poor women microentrepreneurs, initially through direct retail and later through the spinoff registration of a local microfinance institution. With its revised methodology and new marketing name, Kamurj (meaning "bridge" in Armenian), CRS aimed to provide a permanent financial bridge to a more secure future for Armenian families. In October 1999, Kamurj disbursed its first loans from the Vanadzor branch; in December 1999, it set up a second branch in Gyumri. In less than six months, Kamurj had reached nearly 500 clients and had increased on-time repayment to 95 percent. Having firmly established a market niche in the second and third largest cities in Armenia, Kamurj still needed access to the capital—the country’s largest market—to assure stability and future growth.
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