By Anton Usov
Small businesses in Ukraine will benefit from new financing opportunities of up to €120 million(US$131.46million) (equivalent) in local currency under a financing programme organised by the EU, the EBRD and its partner banks. New local currency facilities will provide the equivalent of almost €70 million, and grant funding of under the EU4Business initiative.
Three local banks have already signed up to the programme at this stage Raiffeisen Bank Aval will receive the equivalent of €25 million,(US$27.39million) ProCredit Bank Ukraine the equivalent of €20 million and OTP Bank Ukraine the equivalent of US$25 million. More local financial institutions are expected to joining the programme in the future.
The funds will be on-lent to local small businesses for investments and working capital purposes. SMEs drive the local economy and create almost 80 per cent of jobs in the country. The local currency loans will protect them from the volatility of the currency exchange rate.
The EU4Business initiative aims to improve Ukrainian SMEs’ access to finance and business knowledge through its advisory services, financing and training. It also helps SMEs to create jobs by equipping them with new skills and supporting their ambitions to export to the largest neighbouring market – the EU single market – of more than 500 million consumers.
Head of the EU Delegation to Ukraine, Ambassador Matti Maasikas said: “Along with practical advice on how to access the EU’s single market and how to market their products, one of the main goals of the EU4Business initiative in Ukraine is to improve SMEs’ access to affordable long-term financing in local currency. We are pleased to team up with the EBRD in doing this so that Ukrainian SMEs can benefit from such financing.”
EBRD Managing Director, Eastern Europe and the Caucasus, Matteo Patrone said: “This latest financial initiative by the EBRD and the EU clearly demonstrates our commitment to Ukraine. We are supporting the investment financing of the SME sector, the success of which is essential for the development of the national economy. We are pleased that our long-term partners Raiffeisen Bank Aval, ProCredit Bank Ukraine and OTP Bank Ukraine support this important undertaking, improving access to finance for entrepreneurs across Ukraine.”
The EBRD is the largest international financial investor in Ukraine. Since the start of its operations there in 1993 the Bank has made a cumulative commitment of almost €13.6 billion through 432 projects in the country.
The EU comprises 28 member states. Together, during a period of enlargement of 50 years, they have created a zone of stability, democracy and sustainable development while maintaining cultural diversity, tolerance and individual freedoms. The EU is committed to sharing its achievements and its values with countries and people beyond its borders. Ukraine is a priority partner for the EU. Together with its financial institutions, the EU has mobilised over €13 billion in loans and €2 billion in grants since 2014 to stabilise Ukraine’s economy, to support comprehensive reforms and to help improve the lives of its citizens.