The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are expanding their support program for micro, small, and medium-sized enterprises (MSMEs) and larger companies in Ukraine, which will enable the mobilization of EUR2 billion in new financing through EBRD partner banks thanks to EUR315 million in additional EU support, the financial institution announced on its website.
The additional EU support is being implemented through the Ukraine Investment Framework (UIF) program and includes EUR200 million in guarantees, EUR105 million in grants, and EUR10 million in technical assistance.
As noted in the press release, the new package is expected to provide loans to at least 3,000 MSMEs and preserve approximately 180,000 jobs.
Funds will be provided through the EBRD’s partner financial institutions in Ukraine. According to the bank’s assessment, the expansion of the program should support businesses’ access to financing amid the war, particularly against the backdrop of rising borrowing costs, disrupted logistics, and companies’ need to replace or modernize damaged equipment.
Ukrainian companies will be able to receive investment incentives in the form of EU grants to cover 10% to 30% of the cost of critical capital investments, primarily in high-efficiency and “green” technologies.
At least 50% of these grant incentives will be directed toward priority categories of MSMEs: enterprises with assets damaged or destroyed as a result of the war, businesses in frontline zones, veteran-owned companies, enterprises supporting the reintegration of internally displaced persons and people with disabilities, micro-companies, startups, small farms, as well as businesses led by women and young people.
The program also provides for support to restore activity in Ukraine’s insurance market, specifically the development of solutions for insuring military risks. As part of a pilot project, insurance subsidies are planned to be provided to MSMEs.
Part of the expanded support will be implemented through the Enterprise Security Enhancement (ESE) mechanism, which the EBRD is rolling out on a pilot basis in collaboration with partner financial institutions in Ukraine. It allows banks to reduce the debt burden for borrowers whose assets have been damaged by the war.
To implement this mechanism, it is planned to use EUR 200 million in first-loss guarantees provided by the EU as part of the new phase of the program. Such coverage of credit risk associated with the loss of assets due to the war is intended to support lending for capital investments and the continuity of economic activity.
This support builds on the first phase of the Financial Inclusion Recovery Program, which confirmed significant demand from Ukrainian businesses for financing through partner banks.
As reported, in May the EBRD launched a pilot ESE donor mechanism in Ukraine to partially write off business debt on investment loans in the event of damage to financed assets resulting from hostilities: with PrivatBank—in the amount of EUR 6.8 million, and with Raiffeisen Bank—EUR 1.2 million.
In 2025, the EBRD allocated a record EUR2.9 billion in financing to Ukraine, including EUR1.2 billion through partner financial institutions, as well as EUR504 million under portfolio risk-sharing programs, which facilitated new lending of up to EUR1.6 billion.
The USAID Business Sustainability Investment Project has awarded a second grant of $2.76 million to OTP Bank (Kyiv) to expand access to finance for micro, small and medium-sized enterprises (MSMEs), the bank’s website reports.
“More than 100 companies have already been financed under the first tranche. The new tranche of $2.76 million will bring the total grant amount to $4 million. The funds will be used to compensate for part of the interest rate for borrowing companies,” the website says.
It is noted that the grant program provides for business lending at an interest rate of 9.9% per annum in the first year of the loan agreement, and the difference with the market rate will be compensated by grant funds.
In the second year and thereafter, clients are obliged to pay interest on the use of credit funds at the rate of UIRD3m+5% per annum.
Under the terms of the program, micro, small and medium-sized enterprises with annual revenues of up to EUR 50 million and up to 250 employees belonging to one of the following target groups: relocated or affected by hostilities, companies in critical industries, and companies with female co-owners can receive financing on such terms.
The maximum loan amount that a company or a united group of companies can apply for is UAH 20 million, and the minimum is UAH 1 million.
“The grant program also applies to factoring agreements, under which the bank’s clients can receive up to 90% of the cost of supplies in the amount of UAH 2 million to UAH 20 million. Special conditions will apply to agricultural producers if they use the funds received under the grant program to purchase products from OTP Agro Factory’s partners,” the press release said.
The press service reminded that during the first stage of the program, which started in 2023, more than 100 Ukrainian enterprises were provided with financing.
According to the National Bank of Ukraine (NBU), as of July 1, 2024, OTP Bank ranked 11th (UAH 114.55 billion) in terms of total assets among 62 banks in the country. The financial institution’s net profit for 2023 amounted to UAH 3.71 billion.
JSC OTP BANK has received a second grant from the USAID Business Resilience Investment Project to expand access to finance for micro, small and medium-sized enterprises. More than 100 companies have already been financed under the first tranche. The new tranche of $2.76 million will bring the total grant amount to $4 million. The funds will be used to offset part of the interest rate for borrowing companies.
The grant program stipulates that the bank will lend to businesses at an interest rate of 9.9% per annum in the first year of the loan agreement. The difference between the rate for clients and the market rate will be compensated by grant funds. In the second and subsequent years, clients will pay interest on the use of credit funds at the rate of UIRD3m + 5% per annum (UIRD3m is the Ukrainian index of rates for three-month retail deposits).
Micro, small and medium-sized enterprises with an annual income of up to EUR 50 million and up to 250 employees belonging to one of the following target groups will be able to receive financing on favorable terms from OTP Bank
– relocated businesses or those affected by military operations
– companies belonging to critical economic sectors (agricultural production, production of building materials, electrical devices, transportation, logistics, processing, etc;)
– companies co-owned by women.
“The project started cooperation with OTP Bank under this grant program in September 2023. The results of our partnership are significant. During this time, more than 100 companies have received financing from the bank for almost UAH 550 million at a compensated interest rate. The objectives of the second stage of the program are even more ambitious – to provide access to financing and compensate the interest rate to more than 330 enterprises. We believe that such business support will contribute to the recovery of Ukraine’s economy, which is suffering tremendously from the war,” said Raphael Jabba, USAID Business Resilience Investment Project Chief of Party.
The maximum loan amount that a company or a united group of companies can receive under this program is UAH 20 million, and the minimum is UAH 1 million.
The grant program also applies to factoring agreements, under which the bank’s clients can receive up to 90% of the cost of supplies in the amount of UAH 2 million to UAH 20 million.
Special conditions will apply to agricultural producers if they use the funds received under the grant program to purchase products from OTP Agro Factory’s partners.
“The cooperation between OTP Bank and the USAID Business Sustainability Investment Project continues, and it means a lot to us. The bank has proven to be a reliable and efficient partner, time-tested, and one that fulfills its obligations flawlessly. The grant is extremely important for Ukraine and its economy, which is under incredible pressure in the context of the war. Thanks to this program, businesses in critical industries will receive much-needed support, companies affected by the war will be able to recover, and women entrepreneurs will receive an additional incentive to develop their business,” said Volodymyr Mudryi, CEO of OTP Bank.
During the first stage of the program, which began in 2023, more than 100 Ukrainian enterprises were provided with financing. Among them were companies from the agricultural sector, businesses dominated by women in the management team, as well as enterprises from critical sectors of the economy and those that were forced to relocate production due to the war. In addition, as part of the program, representatives of MSMEs used factoring services on favorable terms.
About the USAID Project “Invest for Business Resilience”
The USAID Investment for Business Resilience (IBR) Project is a five-year program implemented by DAI Global that supports systemic changes in Ukraine’s economy and increases the supply of financing available to Ukrainian businesses. The IBR project aims to transform the country’s financial sector into a well-functioning and competitive market that meets European Union standards and is integrated into international financial systems, while directly providing financing to businesses to ensure sustainable economic growth in Ukraine.
For more information on USAID IBR’s activities in Ukraine, please visit the USAID IBR Facebook page: https://www.facebook.com/IBRUAproject
About OTP BANK
JSC OTP BANK is one of the largest Ukrainian banks with foreign capital, which is a recognized leader in the country’s financial sector. It has been present on the market since 1998 and has a strong reputation as a socially responsible, reliable and stable structure offering European quality services to its customers. The bank provides a full range of financial services to corporate and private clients, as well as small and medium-sized businesses.
Since 2019, according to the decision of the NBU, OTP Bank has been included in the list of systemically important banks of Ukraine, which have a significant impact on the development of the country’s financial system.
In Ukraine, JSC OTP BANK is the flagship of the OTP banking group registered by the National Bank of Ukraine, which also includes OTP Capital AMC LLC, OTP Leasing LLC, Freefly non-state pension fund and OTP Pension open pension fund.
