As of August 1, 2021, ten banks issued 1,917 loans to small, medium and micro-businesses (SME) through portfolio government guarantees totaling UAH 5.007 billion, the Ministry of Finance reported.
“Liabilities on the principal debt, which are partially secured by state guarantees on a portfolio basis, amounted to UAH 2.316 billion. This is about 59% of the total limit of guarantees provided in 2020 (UAH 3.93 billion),” the Ministry of Finance said on its website.
According to it, in July this year, banks provided 122 such loans for a total of UAH 735 million with a share of the state’s liabilities of UAH 306 million.
In terms of the number of loans issued, PrivatBank is in the lead – 945 loans for UAH 859 million in total, which is 100% of the limit of such guarantees provided to the bank in 2020. The second largest bank is Oschadbank – 680 loans for UAH 2.036 billion, according to the data of the Ministry of Finance.
“The program is in the greatest demand in Kyiv, where, in total, 151 loans were issued for UAH 542 million. In Lviv and Dnipropetrovsk regions, which are among the top three, these figures are 136 loans (UAH 340 million) and 129 (UAH 300 million),” the ministry said.
By type of economic activity, most of the loans, partially secured by state guarantees on a portfolio basis, were issued in the areas of wholesale and retail trade (675), agriculture (558) and processing industry (277).
The European Bank for Reconstruction and Development (EBRD) has provided a four-year loan of EUR7.5 million to Bank Lviv for lending to small and medium-sized enterprises (SME) under the EU4Business program, Anton Usov, the EBRD senior adviser on external affairs, has said.
“Small and medium-sized enterprises in western Ukraine will benefit from a new loan of up to EUR7.5 million to Bank Lviv provided under the EBRD EU4Business credit line. The loan will be available for disbursement in the Ukrainian hryvnia, which will protect Bank Lviv’s borrowers from foreign currency-related risks, and offer long maturities,” the EBRD noted.
“The funds are provided in the context of the Deep and Comprehensive Free Trade Agreement (DCFTA) between the European Union (EU) and Ukraine. EU grants will be offered as investment incentives to eligible enterprises to reduce the cost of their capital expenditure on upgrades of technology and production processes to comply with EU standards and regulations,” it said on its website.
Bank Lviv is a regional bank providing banking services to SMEs and private clients across western Ukraine. It is well established in Lviv, Ivano-Frankivsk, Lutsk, Rivne, Ternopil and Uzhgorod regions, as well as Kyiv.
The EBRD is a leading institutional investor in Ukraine and to date has committed more than EUR14.54 billion in over 460 projects to the country.
Kyiv City Council at an extraordinary meeting on Thursday, March 26, established a 50% discount for small and medium-sized enterprises (SME) to pay lease of municipal property due to quarantine measures.
“We promised and found a mechanism to reduce financial burden on small and medium-sized businesses operating in the capital, and which is most vulnerable in this difficult time for the city and the country. Small and medium-sized businesses will get the right to these benefits starting March 11,” the press service of Kyiv City State Administration said, citing Kyiv Mayor Vitali Klitschko.
According to the statement, by the end of July 2020, entrepreneurs are provided with a 50% discount on the payment of communal property leases, and if the property cannot be used, tenants are also exempted from the lease payment until July 31.
According to Kyiv City State Administration, about 900,000 square meters of non-residential communal property are leased in the capital, most of which are rented by about 6,000 small and medium-sized entrepreneurs.
In November, the German-Ukrainian Fund (GUF) will present a new FinancEast program to support micro–, small and medium-sized enterprises (MSMEs) in the government-controlled territories of Donetsk and Luhansk regions, under which it is planned to reimburse up to 50% of the cost of investment projects of enterprises, GUF Executive Director Valeriy Mayboroda has said.
“This program is also co-financed by the EU and its amount is EUR9.5 million,” Country Manager to Ukraine of the KfW Development Bank Kurt Strasser said at a GUF press event in Kyiv on Wednesday.
According to him, these will be subsidies to help medium- and small-sized enterprises that lack access to money over the difficult economic situation, as well as those who are located in the Donbas region.
The FinancEast program is co-financed by the EU through KfW, the GUF Executive Director said.
“The stage of the finalization of contracts and operational guidelines is nearing completion, and from November we will begin the active phase of its implementation,” Mayboroda said.
FinancEast materials indicate that investment projects for MSMEs are medium- and long-term ones for more than 12 months that are related to the purchase, modernization or reconstruction of fixed assets. Under an investment project, financing of current assets up to 20% of its value is allowed.
In 2019, the assets of a current program for lending SMEs in the national currency, which is designed until 2030, grew to EUR14.7 million, or 47%, since the launch of the project in 2017. This program is implemented by the GUF and financed by KfW and the EU.
Since the beginning of the project, 217 enterprises have been funded for a total of about UAH 710 million with an initial budget of the program being UAH 370 million. The average rate is 15.5% per annum. According to Mayboroda, the financial resource of the program was used twice due to the reuse of returned loans.
Partners under the GUF’s program are Kredobank, Ukrgasbank, ProCredit Bank and Bank Lviv. The GUF’s Executive Director said that negotiations with CreditWest Bank were also ongoing on its joining the program.