OTP Bank intends to become a hub for the distribution of grants from international financial partners and access to preferential lending programs for business. This was stated by Volodymyr Mudryi, Chairman of the Board of OTP Bank, at the conference “Finance for Business in Time of War” organized by the European Business Association and the Independent Association of Banks of Ukraine with the support of international donors – the USAID Project “Investing for Business Resilience” and the IFC Project “Asset Based Finance”, implemented in partnership with the State Secretariat for Economic Affairs of Switzerland (SECO).
“OTP Bank plans to become a hub for international grants for business, remaining a reliable partner for international financial institutions that play a crucial role in the resumption of lending. USAID, IFC, and EBRD have enormous capabilities and significant capacity. And we need to tell entrepreneurs about this as much as possible,” said Mr. Mudryi.
During the conference, V. Mudry called on the banking sector, international partners and the state to engage in an active dialogue on the implementation of joint projects to revive lending.
“If you look at the statistics, since July 2023, the loan portfolio of banks has been constantly growing. But we also know that a huge part of this growth is provided by government programs of subsidized loans “5-7-9%,” the banker emphasized.
In his opinion, the macro stability ensured by the NBU, the predictability of the exchange rate, inflation, GDP growth and bank liquidity encourage us to move to a new stage of cooperation for the development of the economy. “Our goal is to work out new approaches to further development of lending, financing and co-financing of entrepreneurs. And we cannot do it without direct dialog with business,” summarized V. Mudryi.
As a reminder, OTP Bank is already implementing a number of projects with international organizations. In particular, a grant program with the U.S. Agency for International Development USAID, under which it provides targeted financing to small and medium-sized businesses to replenish working capital. It also offers investment loans to SMEs with a possibility of reimbursement of up to 20% of the funds received under the program with the European Bank for Reconstruction and Development (EBRD). OTP Bank cooperates with the International Finance Corporation IFC under the Risk Sharing Program agreement to provide financial support to enterprises in key sectors of the Ukrainian economy, especially in the agricultural sector and women-owned businesses.
The Cabinet of Ministers has amended the procedure for granting grants for the creation and development of horticulture, berry growing, viticulture, and greenhouse development.
According to Taras Melnychuk, a representative of the Cabinet of Ministers in the Verkhovna Rada, on Telegram, the decision was made at a government meeting on Friday.
According to the report, the changes improve the mechanisms for supporting business entities operating in the relevant industries.
It is expected that the grant recipient will create jobs and employ full-time employees and pay them the mandatory minimum wage for such specialists.
In addition, the list of conditions for canceling decisions of the Ministry of Agrarian Policy has been expanded, in particular, in case the recipient unilaterally closes its bank account and in case of violation in the transfer of its entire share of co-financing within 30 days after the conclusion of the agreement.
The Cabinet of Ministers has clarified the number of employees required to provide grants for the establishment or development of greenhouse facilities and shortened the list of regions for almond planting.
More and more entrepreneurs and organizations are turning to grant programs in the hope of obtaining financial support for their projects. However, many of them make typical mistakes even at the stage of submitting and implementing an application, which can lead to undesirable consequences. In this regard, Kyiv Analytical Center “Experts Club” together with the founder of “Granta” company and grant projects implementation expert Olga Shaverina, launched a series of YouTube videos, dedicated to the peculiarities of grant financing. In the first video Olga Shaverina shared her experience and told about the most common mistakes made by beginner grantees, as well as gave recommendations on how to avoid them.
The first mistake many people make is not trusting grantmaking tools. Some entrepreneurs do not realize the opportunities that grants provide and miss the chance to get funding for their projects. Lack of information about grant programs and lack of knowledge about procedures can cause missed opportunities.
The second mistake, according to the expert, has to do with not accepting the fact that business is part of society. Many entrepreneurs forget that grant programs are usually aimed at solving social problems or supporting certain social initiatives. Emphasizing the social importance of their project can help in attracting the attention of grantmakers.
The third mistake is neglecting procedures. This is a critical component of successful grantmaking, where proper paperwork and adherence to grant program requirements are critical to your success. Negligence in this matter can cause the application to be rejected.
“Reassign the preparation of the grant application to your secretary on the principle of “He/She can do it! ” because he/she knows how to do the paperwork is the most common mistake among applicants. Most projects fail exactly on this basis,” says Olga Shaverina.
The fourth mistake entrepreneurs often make is underestimating the cost of training. First of all it is a question of labor inputs, because preparation of the grant application demands time, efforts and resources. Some entrepreneurs underestimate the amount of work required to prepare a quality application. Developing a detailed budget, creating a project plan, and analyzing the market and competitors all require careful preparation and research. The lack of a detailed plan and an incomplete understanding of the necessary resources can lead to project failure.
Finally, a fifth mistake worth noting is misunderstanding partnerships and consultant selection. Working in partnership with other organizations or consultants can greatly improve the chances of a successful grant project. However, choosing partners incorrectly or not understanding their role and contribution to the project can lead to conflicts and ineffective work. The criteria for selecting partners and consultants must be clearly defined and meet the goals and needs of the project.
Ms. Shaverina also emphasized the importance of a proper understanding of reporting. Many entrepreneurs underestimate the importance of reporting and do not pay adequate attention to it. Failure to comply with reporting requirements may result in penalties or loss of funding. Therefore, it is necessary to carefully study the reporting requirements and provide all the necessary documents in a timely manner.
Maxim Urakin, founder of the Club of Experts, in turn, shared statistics on grant assistance to Ukraine for the years 2022-2023. Thus, he noted that in 2022 international aid to Ukraine amounted to more than $32 billion, including 18 billion in grant support.
“This year Ukraine has already received about $19 billion in assistance, of which $11 billion was received in January-March, of which $3.7 billion came in the form of grants. That is why grant assistance, including those for specific projects, is extremely important for our economy under current conditions,” said Maxim Uralkin.
So, grant programs are an important tool for business development and implementation of social initiatives. However, in order to receive grant support successfully, it is necessary to avoid common mistakes, which the experts told us about. Compliance with requirements and procedures, understanding the importance of the social aspect of the project, choosing the right partners and consultants, as well as consciously estimating costs and preparing for reporting are all factors that can increase the chances of success.
You can learn more about the mistakes you make when submitting a grant proposal by watching the video on the Club of Experts YouTube channel:
https://www.youtube.com/watch?v=8F7qjrSoWac
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CLUB_EXPERTS, EXPERTS, GRANT_APPLICATION, GRANT_FUNDING, GRANTS, SHAVERINA, URAKIN
Ukraine’s state budget on Thursday received $1.215 billion in grant funds through the World Bank’s Multi-Donor Trust Fund: $1.2 billion from the U.S. and ;15 million from Finland.
“The grant funds are provided as part of the fifth additional funding under the project Supporting Public Expenditures for Sustainable Public Administration in Ukraine (PEACE in Ukraine). The purpose of the project is to partially compensate state budget expenditures, including social and humanitarian, not related to the sphere of security and defense,” the Ministry of Finance said on Thursday.
It specified that the attracted grant financing will be used for remuneration of state bodies’ employees and teaching staff, pension payments, as well as payments under certain programs of state social assistance (IDPs, people with disabilities, low-income families and payments of housing and communal subsidies).
The Finance Ministry added that in cooperation with Deloitte Consulting, which implements the USAID SOERA project, it is monitoring the use of direct budget support from the US government, and with PriceWaterhouseCoopers Ukraine, an auditing company, is reviewing the agreed procedures in order to determine the eligible state expenditures made by Ukraine in 2022.
It is indicated that the size of the PEACE in Ukraine program reached $16.5 billion and EUR1.4 billion (IBRD loans, MIGA loans, grants of the Multi-Donor Trust Fund).
The Cabinet of Ministers has added rose hips and almonds to the list of fruit and berry crops for planting which one can receive a grant under the state program to establish or develop horticulture, viticulture and berry growing.
According to the representative of the Cabinet of Ministers in the Verkhovna Rada Taras Melnychuk in Telegram, the relevant changes were made to the Cabinet of Ministers resolution No. 738 “Some issues of grants for businesses” at a government meeting on Tuesday.
According to Melnychuk, a separate list of areas for planting has been established for almonds.
According to the decree, the enterprise that has received the grant must prove the creation of new jobs with copies of documents submitted to the State Tax Service. In particular, it is necessary to provide a copy of the tax calculation of the amounts of income accrued (paid) in favor of taxpayers-individuals, the amounts of tax withheld from them, as well as the amounts of accrued single fee for recent reporting periods.
In addition, the government has identified a list of taxes and fees for monitoring and fixing the refund used by the business entity.
As reported, since the beginning of the year as of May 19, 61 agro-enterprises received 201 million UAH for the development of horticulture, berry-growing, viticulture and greenhouse farming within the framework of the profile government grant.
The USAID Competitive Economy of Ukraine program announced a grant program to create and support associations of businesses into export alliances with a total funding of $1.5 million, the Economy Ministry press service said Friday.
“Grant support for export alliances will strengthen the potential of Ukrainian enterprises and encourage them to unite for common goals of conquering new markets,” USAID project manager Natalya Petrova said in a statement.
The program offers about 15 grants, ranging from $35,000 to $150,000. Applications will be accepted till September 30, 2023. Given the considerable interest, reception and consideration of applications will be held in stages on June 30 and September 30, 2023.
The Ministry of Economy added that the goal of the grant program is to support businesses seeking to jointly promote their products in international markets. The initiative is implemented in partnership with the Office for Entrepreneurship and Export Development and the national project “Dia.Biznes”.
As the press service specified, the priority sectors for grant support are information technology, engineering, manufacturing, and creative industries and services. However, this USAID program is open to applications to support other sectors that meet the selection criteria.
The USAID Competitive Economy of Ukraine (CEU) program supports start-ups and small to medium-sized enterprises (SMEs) to increase their competitiveness in Ukraine’s domestic market and in international markets, assists in the development of a simplified and transparent business climate, and provides opportunities for Ukrainian companies to take advantage of international trade. A key instrument for implementing the USAID QEU program is the $12.5 million grant program at the national scale for 2018-2023.
