EU invests EUR 600M to support SMEs in eastern Ukraine
About 150 small and medium-sized enterprises (SMEs) from the frontline territories of Ukraine have taken advantage of the assistance of the European Union under the FinancEast programme, which is being implemented in partnership with the Entrepreneurship Development Fund as part of the EU's EU4Business initiative.
Christian Ben Hell, Head of Agriculture Sector at the EU Delegation to Ukraine, said this during the presentation of the annual report of the Entrepreneurship Development Fund for 2020, an Ukrinform correspondent reports
He recalled that the programme was initiated in 2017. First, European partners financed it for EUR 15 million. Now this amount has grown to EUR 75 million.
The support programme for the eastern regions of Ukraine is based on four components, namely: governance and decentralization, security, reforms in various areas, as well as economic recovery and the development of micro, small and medium-sized enterprises.
The European Union has decided to provide flexible and affordable assistance to SMEs in the region. The work is carried out in two directions – grants to reduce banking risks when lending to businesses and direct grants that compensate 50% of the cost of investment projects.
"The EU's ultimate goal is to restore banks' confidence in lending to entrepreneurs working close to the contact line, where the risks are much higher. By restoring trust and confidence in the results, we can ensure sustainable access of micro, small and medium-sized businesses to financial resources and help rebuild these territories," Hell summed up.
On December 19, 2019, the German-Ukrainian Fund and three Ukrainian banks – OTP Leasing, Oschadbank, Ukrgasbank – signed subsidy agreements on the implementation of FinancEast programme as part of the EU's EU4Business initiative. This programme is aimed at restarting financing of SMEs in government-controlled areas of Donetsk and Luhansk regions, economic recovery of Donbas and improving its investment attractiveness.