Business Loans Will Hardly Become Cheaper than 23 to 25 % Per Annum

30/ 08/ 2023

Andriy Volkov, Investohills Group’s founder and managing partner, predicts that the National Bank’s reference rate reduction to 22 percent will hardly result in reduced lending rates in Ukraine. “Theoretically, this measure is supposed to push lending rates down and make loans more affordable. However, I believe that the rates will hardly go down, if at all. Loans are unlikely to become cheaper than 23 to 25 percent per annum. And these rates remain unaffordable for business, especially if one considers longer-term investment loans, rather than overdraft and working capital loans under one year,” the financier indicated. According to him, the level of interest rates is not the core problem; the problem is that the banks are not ready yet to lend to the economy on a full-fledged basis due to serious military risks and the low solvency of potential borrowers. “In the near future, lending will be available mainly under government programs. Also, loans will be available for a limited number of proven customers who are still able to serve their debt,” Volkov predicts.

Andriy Volkov, Investohills Group’s founder and managing partner, predicts that the National Bank’s reference rate reduction to 22 percent will hardly result in reduced lending rates in Ukraine.

“Theoretically, this measure is supposed to push lending rates down and make loans more affordable. However, I believe that the rates will hardly go down, if at all. Loans are unlikely to become cheaper than 23 to 25 percent per annum. And these rates remain unaffordable for business, especially if one considers longer-term investment loans, rather than overdraft and working capital loans under one year,” the financier indicated.

According to him, the level of interest rates is not the core problem; the problem is that the banks are not ready yet to lend to the economy on a full-fledged basis due to serious military risks and the low solvency of potential borrowers.

“In the near future, lending will be available mainly under government programs. Also, loans will be available for a limited number of proven customers who are still able to serve their debt,” Volkov predicts.