REUTERS
The budget of the GUF’s programme is EUR 10 million.
A total of 112 enterprises raised UAH 380 million in loans during the first year of a programme of the German-Ukrainian Fund (GUF) to support small and medium enterprises’ (SMEs) investment projects. This programme is a part of the EU4Business initiative, the active phase of which started in September 2017.
"The German-Ukrainian Fund has introduced an effective model for SME funding thanks to the German Government's loan and EU financial assistance. In one year alone they managed to provide SME projects with a total funding of UAH 380 million. The next step is to scale this model up to cover more SMEs in Ukraine which are keen to develop and modernise their business," Oleh Strynzha, the Executive Director of GUF, said, according to the EU Delegation in Ukraine.
The budget of the GUF’s programme is EUR 10 million. This is a loan from the German Government issued through the German KfW Development Bank, which has been converted into hryvnias. Lending in the national currency became possible thanks to the EU's EU4Business initiative, which provided EUR 5 million to cover potential losses from exchange rate fluctuations. According the programme terms, Ukrainian entrepreneurs can receive loans in hryvnia equivalent of EUR 250,000 for a term of up to 6 years at an interest rate of 15% in the GUF’s partner banks - ProCredit Bank, KredoBank and Ukrgasbank. This rate is much lower than the current level of market rates.
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“We believe that one of the main challenges for Ukrainian SMEs in getting access to finance are currency risks and high interest rates. The EU4Business initiative of the EU is addressing among others exactly these bottle necks that should lead to growth and new jobs,” Simone Raudino, coordinator of the sector of economy, trade and international cooperation at the EU Delegation to Ukraine, said.
The Kyiv City State Administration and the Ternopil Regional State Administration have joined the GUF’s programme. They compensate half of the interest rates on SME loans from local budgets. For businessmen this means even more affordable and cheap loans.
The GUF has also signed cooperation agreements for launching similar programmes with the state administrations of Kharkiv, Cherkasy, Volyn and Odesa regions.
"On my opinion, such programmes are a positive example in Ukraine, which demonstrates the successful combination of international and local partners' efforts to improve financial and credit support programmes," Lutz Horn-Haacke, Director of the KfW Office in Ukraine, said.
Most active in attracting the loans were SMEs in agriculture (77%), manufacturing (18%) and hotel and restaurant business (5%). Entrepreneurs from Chernihiv, Vinnytsia, Odesa and Dnipropetrovsk regions benefited most from the credit programme.
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UNIAN memo. The European SME week in Ukraine is part of a pan-European campaign for developing small and medium businesses, promoting entrepreneurship and informing about EU’s support for private sector development. Ukrainian entrepreneurs will find out about bright ideas and opportunities for cooperation and support offered by the European Union for local businesses.
From September through November 2018, a series of events will take place in 16 cities across Ukraine, where business will learn how to enter the international markets, find financial resources, strengthen entrepreneurial skills, and how to improve the business climate in Ukraine.Events calendar is here.