Factoring reform has the potential to address the market gap in receivables finance in Ukraine, currently estimated at between EUR 1.5 billion and EUR 3.4 billion, and developing the factoring sector will help expand access to finance for businesses and save jobs, Head of the Trade Facilitation Programme of the European Bank for Reconstruction and Development (EBRD) Rudolf Putz said during a webinar held jointly by the EBRD and the National Bank of Ukraine (NBU) on Tuesday.
According to the EBRD, in Ukraine, receivables finance represents only 0.1% of the country’s GDP, compared to 8% of output in neighboring Poland, where the factoring market remains the fastest-growing financial sector, worth EUR 66.1 billion and serving more than 18,000 businesses.
“The demand from smaller businesses, which typically find it difficult to secure bank loans, will grow exponentially as the COVID-19 pandemic shows no signs of slowing down,” Putz said.
The EBRD said that the webinar brought together more than 100 trade professionals, bankers and international experts. The two-day virtual event called for sound policy and a good regulatory framework to enable the healthy development of factoring, to expand access to finance for small and medium-sized enterprises (SMEs) and to strengthen their financial resilience.
The event was delivered by the factoring working group at the National Banking Association of Ukraine in cooperation with FCI, the largest global representative body for factoring and financing of open-account domestic and international trade receivables.
According to the report, drawing on the experience of Greece, Poland, Turkey, the United Kingdom and the United States of America, the working group and the National Bank of Ukraine agreed the next steps in reforming the sector.
These include the separation of factoring from debt collection; business education and marketing of factoring; the promotion of paperless and automated document flows; the protection of creditors’ rights; the rethinking of factoring-related risk assessment; the establishment of a factoring risk insurance framework; and improved legislative regulation.
FCI expressed a strong view that Ukraine needs to develop an effective regulatory policy governing the factoring business and to adopt a factoring law.
The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of almost EUR 15 billion through 466 projects in the country.
The EBRD launched two Solidarity Packages in response to the COVID-19 crisis and now expects to dedicate its total business investment of up to EUR 21 billion in 2020-21 to overcoming the economic impact of the crisis.
Income from gambling market legalization in 2021 will amount to UAH 5 billion, President of Ukraine Volodymyr Zelensky has said.
“What has existed in the shadows for years, now with the first licenses, should bring UAH 5 billion to the budget already next year,” Zelensky said from the rostrum of the Verkhovna Rada on Tuesday, October 20.
The draft state budget for 2021 does not contain a forecast of income from the sale of the first licenses in the gambling market. The state budget for 2020 assumed income of UAH 4 billion from gambling legalization.
The Ministry of Health of Ukraine has asked the World Bank to increase the amount of funds previously considered for Ukraine in order to purchase vaccines, according to the agency’s website.
“Now the Ministry of Health has two priority areas in the fight against COVID-19 from the point of view of the healthcare system. The first one is to ensure maximum testing with PCR tests. Therefore, in addition to our large laboratories, it is important to consider the possibility of equipping laboratories for 200-250 PCR tests directly in hospitals. The second priority is the vaccine. We turned to the World Bank with a request to increase the amount of funds that were previously considered for allocating to Ukraine for the purchase of vaccines,” Minister of Health Maksym Stepanov said.
He expressed hope that these two areas will become the basis for new strategic projects between the Ministry of Health and the bank.
Arup Banerji, the World Bank Regional Country Director for Eastern Europe (Belarus, Moldova and Ukraine), in turn, promised “to cooperate with the ministry’s team to provide all the resources necessary to implement these directions.”
The manufacturer of upholstered furniture Hjort Knudsen (Denmark) intends to invest EUR 11 million in the construction of an enterprise for production of designer furniture on the outskirts of Rivne as part of expanding its activities in Ukraine, the press service of Rivne Regional State Administration reports.
“Another powerful investor is entering Rivne region. The Danish sewing company Hjort Knudsen decided to create a branch in the region. The arrival of such an investor indicates attractive business conditions in the region, which will attract other donors,” head of the regional state administration Vitaliy Koval said during a meeting with Director of United Fashion Ukraine Steen Laursen.
The investor plans to build a production facility with an area of 40,000 square meters, create 1,000 jobs. The plans include the creation of a closed cycle production with the manufacture of value-added products.
The project was being prepared for about a year with the involvement of the regional state administration, the InvestInRivne agency.
Currently, Hjort Knudsen has four branches in Ukraine – the divisions of United Fashion Ukraine, namely in Lviv, Pochayiv (Ternopil region), Velyki Mosty and Brody (both in Lviv region). The enterprises produce traditional and designer sofas, club and office chairs, the assortment includes more than 200 fabric models and a wide range of leather upholstery.
Mariupol seaport (Donetsk region) in January-September 2020 increased cargo transshipment by 16.5% compared to the same period in 2019, which is 5.335 million tonnes.
According to the website of the state-owned enterprise Ukrainian Sea Ports Authority, the port increased the transshipment of export cargo by 17.41%, to 4.461 million tonnes during this period, but reduced the transshipment of imported cargo by 36.84%, to 489,900 tonnes, and increased transshipment of cabotage goods by more than 83.5 times, to 384,200 tonnes. At the same time, the port did not handle transit cargo.
In terms of the cargo nomenclature in the nine months of 2020, Mariupol port increased the transshipment of liquid cargo by 10.91%, to 118,900 tonnes, reduced the transshipment of bulk materials by 2.71%, to 1.599 million tonnes, and increased the transshipment of packaged goods by 27.86%, to 3.617 million tonnes.
During this period, no containers were transshipped in the port.
As reported, the volume of cargo transshipment at Mariupol seaport increased by 10% to 6.484 million tonnes in 2019 as in comparison to 2018.
Mariupol seaport is one of the largest ports in Ukraine. Its capacity allows transshipping over 17 million tonnes of cargo per year. The port is open year-round for vessels up to 240 meters in length and up to eight meters draft. Its territory is 73.2 ha, and the length of the berthing line is 4.2 km.
SkyUp (Kyiv) is planning to launch flights from Zaporizhia to Batumi (Georgia), Larnaca (Cyprus) and Prague (Czech Republic) at the end of spring to summer 2021.
The company’s press service said on Monday that tickets are available for purchase on the SkyUp website.
The airline also said that it has extended for the winter season flights on the Kyiv-Zaporizhia-Kyiv route, which it started operating from the new airport terminal on October 19.
“Government support for such important infrastructure projects that make passengers’ vacation more comfortable, also opens wide opportunities for increasing destinations, flight frequencies and potentially setting lower fares. We are grateful to the city and airport authorities for the honor of the first Ukrainian low-cost airline to operate the first flight,” the airline’s press service said, citing SkyUp CEO Dmytro Seroukhov.
As reported, the new terminal of Zaporizhia international airport started accommodating internal flights on October 19.
