GUF and Ukrgasbank expand financing support for Ukrainian SMEs
Ukrgasbank will start lending to Ukrainian small and medium-sized enterprises (SMEs) at a rate of 15% per annum in hryvnia. It became possible due to the UAH 81 million worth of agreement the German-Ukrainian Fund (GUF) and Ukrgasbank signed on November 23, under the Program for supporting SMEs. The Program runs in Ukraine with the financial support of the German Government (through the German State Development Bank KfW) and in conjunction with the EU-funded EU4Business initiative that provides funds for covering foreign exchange risks.
"The German-Ukrainian Fund Program gives us new tools for lending to small and medium-sized businesses,” said Yevhen Metsger, Deputy Chairman of the Board of JSB "Ukrgasbank". “SMEs receive a new impetus and opportunities for development. This will help strengthen the country's economy and accelerate its transition to European market standards."
The agreement entitles the SMEs to obtain a loan:
- to purchase and upgrade equipment,
- to purchase, construct or reconstruct premises,
- to replenish working capital for production expansion.
"Ukrgasbank's accession to the Program opens a new way for small and medium enterprises in Ukraine to available credit facilities: now financing is provided by the efforts of three partner banks of the NUF. We are pleased to see the development of this initiative with the support of the German Government through KfW and the European Union and we hope that the steps taken within the framework of the Program will help Ukraine's economy in the coming years," said Lutz Horn-Haacke, Director of the KfW Office in Ukraine.
Under the agreement, priority sectors for lending include agriculture, processing industry, hotel and restaurant businesses, and energy efficiency projects.
Boris Filipov, Sector Manager, Private Sector Development and Public Procurement, Delegation of the EU to Ukraine said: "The European Union has the task of developing small and medium-sized businesses all over Europe. And Ukraine is one of the most promising partners in this business for us today. The EU4Business project is pleased to take part in improving the access of SMEs to affordable long-term financing in the national currency."
"The signing of the Agreement with Ukrgasbank completes the first phase of the SME Financing Program, which began this year. Now our priorities move towards lowering the interest rate on SME loans throughout Ukraine, as has already been done in Kyiv," said Oleg Strynzha, Executive Director of the GUF.
About GUF: The German-Ukrainian Fund is established by the German State Development Bank KfW, the Cabinet of Ministers of Ukraine, and the National Bank of Ukraine.
About the SME Support Program: The SME Support Program is funded by the Government of Germany and supports Ukrainian SMEs with long-term financing in investments and working capital. Under the Program, the German State Development Bank KFW provides Ukrainian SMEs with UAH 300 million over the next 40 years through resident banks in Ukraine. ProCredit Bank and KredoBank have already joined the Program.
About EU4Business: The EU4Business is an EU initiative that supports a private sector in the Eastern Partnership countries, including Ukraine. It aims to improve a business climate through offering professional advice and access to financing for small and medium-sized businesses. Support under the EU4Business initiative is provided jointly with other organisations. The initiative promotes economic growth and job creation.
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