Germany’s KfW bank will provide UAH 300 million to Ukraine to support financing of small and medium-sized enterprises (SME).
According to a press release of the German-Ukrainian fund (GUF), the agreement was signed by the National Bank of Ukraine (NBU), Finance Ministry of Ukraine and KfW in Kyiv on April 4.
Deputy Head of GUF Valeriy Maiboroda said at the presentation of the program that the program was intended to promote growth of capital investment in the Ukrainian economy, boosting capitalization of the economy and expanding imported goods replacement.
The top priority sectors are light industry, processing industry, cattle breeding and sustainable energy.
He said that GUF would be a second tier bank in the program. The bank will work with businessmen via partner banks.
At present the partner banks are ProCredit Bank, Ukrgasbank, Oschadbank, CreditWest Bank (all based in Kyiv) and Megabank (Kharkiv). The partnership agreement with Credobank (Kyiv) will be signed.
Under the partnership scheme a businessman files an application for a loan to the partner bank, which discusses it and transfers to GUF for approval. The approved application is returned to the bank and then the bank signs the loan agreement with the businessman. The loan is provided by GUF.
When the loan is returned, partner banks return the funds to GUF.
Under the program SME with the number of hired workers up to 250 will be funded. The funds will be provided in hryvnias at 17% per annum.
The credit rate will be floating. The largest sum of the loan is EUR 250,000.
Investment loans will be provided for the period of up to six years. The loans to finance working capital will be provided for the period of up to two years.
The fee for the provision of the loan is 0.5% for investment loans and 1% for working capital.
The German-Ukrainian fund was created in 1999. Its founders are the NBU, Finance Ministry and KfW. (Interfax-Ukraine/Business World Magazine)