The European Union boosts support to Ukrainian SMEs with new finance from the EIB Group to Oschadbank
The European Investment Bank (EIB) and the European Investment Fund (EIF) – jointly the EIB Group – signed the guarantee agreement with Oschadbank in order to support EUR 50 million of lending to small and medium-sized enterprises (SMEs) in Ukraine made possible with European Union support through the EU4Business initiative.
This agreement will enable Oshadbank to facilitate access to finance for local SMEs by providing a 70% guarantee on each loan and subsequently extend financing on favourable terms, including with reduced collateral requirements. This guarantee transaction is expected to unlock additional financing to small and medium-sized businesses and ultimately to sustain jobs and new business opportunities in Ukraine. The guarantee is funded by the European Union through the Neighbourhood Investment Facility under the EU4Business initiative.
The EIB Group joins forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.
Oschadbank is the universal banking institution providing a wide range of financial products and services in Ukraine, including retail and corporate banking services, domestic and foreign currency transfers and currency exchange. The bank operates domestically through 23 regional branches and over 3 500 operational outlets spread across Ukraine.
Ambassador Hugues Mingarelli, Head of the EU Delegation to Ukraine, said: “SMEs are the cornerstone of the Ukrainian economy. Today they need better access to affordable and long-term finance in order to continue to grow, to export to the European market and create new jobs across the country. Contributing to improved conditions for access to finance is one of our main priorities under the EU4Business initiative. I am pleased that today we are delivering on this priority.”
Bruno Denis, Head of EIB Representation in Kiev, stated: “Support for SMEs is one of the EIB Group’s priorities as by financing them we are boosting economic growth, innovation and employment. We are confident that this guarantee agreement will support Oschadbank to unlock additional financing to SMEs and to intensify the bank’s efforts to make a sustainable contribution to the economic, social and environmental development of the country.”
Martins Jansons, Senior Structured Finance Manager at the EIF, noted: “SMEs continue to be drivers of the economic growth and in this vein the guarantee will unlock some EUR 50 million in loans for hundreds of SMEs in Ukraine. Facilitating access to the finance that small businesses need to innovate and expand is a key to boost investment, employment and growth throughout Ukraine.”
Andriy Pyshnyy, Chairman of the Management Board at Oschadbank, noted: “
Andriy Pyshnyy, Chairman of the Management Board at Oschadbank, noted: “It is quite logically for Oschadbank to sign this agreement under the EU4Business initiative, since the support for SMEs is the priority for Bank’s development. Recently, the Bank has announced the launch of its large-scale support program for small- and medium-sized businesses nationwide, both consulting and financial. The key goal of the program is to assist SMEs at various stages of their business activity. By the end of 2020 Oschadbank intends to be listed among TOP-3 Ukrainian banks in the small business servicing by the loan portfolio size”.
Background information:bout EIB:
The European Investment Bank (EIB) is the European Union’s bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. The EIB works closely with other EU institutions to implement EU policy.
As the world’s largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but it also supports the EU’s external and development policies.
The EIB finances projects in Ukraine on the basis of the EU External Lending Mandate. This mandate provides EIB with a guarantee covered by the EU Budget for projects of significant interest to the EU and its Eastern Neighbours in the areas of social and economic infrastructure, local private sector development and climate action.
EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to realise their full potential and boost economic growth. EU4Business support is delivered by the EIB together with and other organisations outside the EU such as the European Bank for Reconstruction and Development. All EU activities that support SMEs in the Eastern Partnership countries are part of EU4Business. For more information, visit: www.EU4Business.eu
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.
Oschadbank: Yaroslava Titova, TitovaYO@oschadbank.ua, tel.: +380 44 247 8506/mob.: +380 67 246 3836
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