The UK-based European Bank for Reconstruction and Development (EBRD) and the EU recently committed EUR 120 million (USD 132 million) to implement the EU4Business Initiative in Ukraine. Through the program, EBRD will provide local banks with approximately EUR 70 million (USD 77 million) in local currency to on-lend to small and medium-sized enterprises (SMEs), eliminating the foreign-exchange risk that the SMEs might have taken on by borrowing from other sources. The remainder of the funding will be distributed as grants. Participating SMEs may also receive “practical advice on how to access the EU’s single market and how to market their products,” according to Matti Maasikas, the Head of the EU Delegation to Ukraine.
Matteo Patrone, EBRD’s Managing Director for 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.”
Raiffeisen Bank Aval is a Ukranian subsidiary of Austria-based Raiffeisen Bank International, which is active in 28 countries in Europe and Asia. ProCredit Bank Ukraine is a member of Germany-based ProCredit Group, which is active in 13 countries in Europe and South America. Similarly, OTP Bank Ukraine is part of Hungary-based OTP Group, which serves clients in 10 countries throughout Eastern Europe. Additional banks in Ukraine are expected to join EU4Business in the future.
Created in 2009, EU4Business provides advisory services, financing and training to SMEs in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. As of 2018, the initiative has 43 active projects and a portfolio of EUR 320 million (USD 353 million). Since the inception of the program, its partner banks have lent approximately EUR 1.96 billion (USD 2.2 billion) to approximately 66,000 SMEs.
EBRD was founded in 1991 and has 67 shareholding countries – plus the EU – as of 2019. With a focus on “the promotion of private and entrepreneurial initiative,” it invested EUR 9.5 billion (USD 10.9 billion) during 2018 in 395 projects worldwide.
By Anna Gravois, Research Associate
Sources and Additional Resources
EBRD press release
https://www.ebrd.com/news/2019/ebrd-and-eu-commit-fresh-funds-to-support-smes-in-ukraine-.html
EBRD homepage
https://www.ebrd.com
EU4Business homepage
http://www.eu4business.eu
Raiffeisen Bank Aval homepage
https://www.aval.ua/en
ProCredit Bank homepage
https://en.procreditbank.com.ua
OTP Bank homepage
https://en.otpbank.com.ua
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