The Ministry of Finance of Ukraine supports the development of small and medium-sized companies using a EUR 400m loan received from the European Investment Bank (EIB).
On October 5, 2017, the Ministry of Finance signed agreements with the first selected Ukrainian bank (“MEGABANK” and “UKRGAZBANK”) paving the way to the use of this loan to foster investments in small business and to cover the need of small companies for working capital. The EIB loan is agreed for five years with a prolongation option.
At the signing ceremony, deputy Minister of Finance for European integration Yuri Butsa said: “Development of small and medium-sized business is crucial for the competitiveness of the Ukrainian economy and its sustainable growth. That is why the Ministry of Finance of Ukraine is actively working to improve the effectiveness of the state support mechanisms for small and medium-sized companies as well as to improve the business climate in Ukraine. Since access to financial resources is a key issue impeding the development of Ukrainian companies, the loan from the European Investment Bank shall help create a source of stable and consistent support for small and medium-sized business through bank loans”.
What’s it about?
The Ministry of Finance received a long-term loan from the EIB to finance projects of small and medium-sized business as well as projects related to the social and economic infrastructure including energy efficiency, mitigation of climate changes and adaptation to them.
According to the agreement with the EIB, the Ministry of Finance supported by its Agent – UKREXIMBANK – shall provide loans to the selected banks which shall finance Ukrainian companies.
The participating banks will be engaged in this project in line with the requirements stipulated in the Decree of the Cabinet of Ministers No. 1054 dated November 30, 2016.
What does it mean for Ukraine?
The state support of bank loans for small and medium-sized business will help diversify the economic growth of Ukraine and contribute to employment as well as improve the business climate and help Ukrainian small and medium-sized companies enter the market of the European Union.