Ukrainian small and medium-sized enterprises will be able to attract up to 143 million euros of lending on more favorable terms thanks to a new guarantee agreement between the European Investment Bank Group (EIB) and ProCredit Bank. The program provides for financing up to 715 companies, primarily those affected by the Russian war.

The European Investment Bank announced this on October 21.

The guarantee is provided by the European Investment Fund (EIF), which is part of the EIB Group. It will cover part of ProCredit Bank's credit risks, allowing the financial institution to expand lending to entrepreneurs and offer them better terms.

In particular, the mechanism involves reducing collateral requirements and extending loan repayment periods. A significant part of lending is planned to be carried out in hryvnia, so that Ukrainian enterprises can more easily raise funds for current operations and investments.

Priority recipients of financing will be:

  • enterprises affected by Russian aggression;
  • businesses founded or led by veterans;
  • companies led by women;
  • enterprises of young entrepreneurs.

The program is designed to help companies maintain operations, preserve jobs, and finance development even amid war risks.

EIB Vice-President Karl Nehammer noted during a visit to Ukraine that the new guarantee is intended to provide entrepreneurs with access to financial resources necessary to continue investing and recovering the economy.

ProCredit Bank CEO Oleksandr Povshednyi emphasized that support for small and medium-sized businesses allows preserving the country's economic potential, and European guarantees expand the bank's ability to lend to enterprises that continue to work and create jobs.

The new agreement is the third under the Ukraine Facility Partial Portfolio Guarantee mechanism. It is implemented with the support of the European Union through the investment component Ukraine Facility - Ukraine Investment Framework.

Overall, through this mechanism and Ukrainian partner banks, it is planned to provide businesses with access to financing totaling over 1.1 billion euros.

It should be noted that the announced 143 million euros is a potential lending volume, not the amount of already issued loans. ProCredit Bank will directly provide loans to enterprises, evaluating applications and setting financing terms.

The EIB announcement does not provide exact interest rates, maximum size of an individual loan, or start dates for accepting applications.

Source: European Investment Bank