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EU, EBRD extend €120 m to Ukraine to support SMEs
The European Union, the European Bank for Reconstruction and Development (EBRD) and its partner banks launched a financing program under which up to get a €120 million will be provided to Ukraine to promote small and medium-sized enterprises (SMEs).
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 program at this stage Raiffeisen Bank Aval will receive the equivalent of €25 million, ProCredit Bank Ukraine the equivalent of €20 million and OTP Bank Ukraine the equivalent of $ 25 million. More local financial institutions are expected to joining the program 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 percent 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 neighboring market – the EU single market – of more than 500 million consumers.
Ambassador Matti Maasikas, Head of the EU Delegation to Ukraine, 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.”
Matteo Patrone, EBRD Managing Director, Eastern Europe and the Caucasus, 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.”
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