Germany enables almost UAH 500million in financing of Ukrainians MSMEs
The first stage of the program "Access to Finance and MSME Resilience Support in Ukraine" was completed, which was aimed at increasing the competitiveness and financial stability of micro, small and medium-sized enterprises of Ukraine, promoting the continuous development of the entrepreneurial potential and competencies of MSMEs.
Financing was provided by the German government within the international cooperation project ReACT4UA ("Utilization and Implementation of the Association Agreement between the EU and Ukraine in the field of trade"). The initiative was implemented by the German government company Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in partnership with the German Sparkassenstiftung for International Cooperation, Business Development Fund (BDF) and two Ukrainian banks – Lviv and Oschadbank.
"For its growth enterprises (SME) require liquidity. We provide the necessary cash through our loan subsidy program", – commented Armin Hofmann, Programme Director of EU4Business – SME Competitiveness and Internationalization, GIZ.
136 entrepreneurs from all over Ukraine (except temporarily occupied territories) participated in the program. They received loans for investment purposes or replenishing working capital in one of the partner banks of almost UAH 500million. After successfully implementing loan funds, each participant received a grant to compensate for expenses. The total amount of granted grants is over UAH 59 million.
"As soon as Bank Lviv received the invitation to become a partner of the programme, we already knew that the partnership would be successful. Because business support is our strategic direction. During the five months of the program, we received several hundred applications for participation. As a result, 78 enterprises that needed investment for development were financed. Among them are both large factories that, for example, purchased and installed solar panels, and smaller farms that were able to purchase new tractors for tillage. We managed to respond to the needs of business comprehensively — to combine the possibilities of the grant program with bank loan products. The synergy of efforts always has a positive effect on the capacity of Ukrainian business," — says Olga Filipenko, Executive Director of Bank Lviv.
Natalia Butkova-Vitvitska, a Member of the board of Oschadbank, responsible for MSME, noted: "This grant program is already our third project with German partners. The success of Oshchad's cooperation with Sparkasse is based on the similarity of the two banks at the structural level, in the scope of business and the history of creation, on Oshchad's previous experience in implementing grant programs at the national level and our largest network of branches in Ukraine with highly professional managers who are ready to provide advice to entrepreneurs both personally, and online. Our mutual trust and understanding has already grown into a reliable partnership open to further joint projects."
In addition to financial support, entrepreneurs were able to receive consulting assistance from the "All-Ukrainian Association of Management Consultants "CMC-Ukraine" lasting up to 53 hours in the following areas: expansion of sales markets, operational and production efficiency, marketing and sales, digital transformation, energy efficiency, personnel management, strategy development and adaptation, legal aspects, accounting and taxation.
Niclaus Bergmann, Managing Director at the German Sparkassenstiftung for International Cooperation, said: "German Sparkassenstiftung for International Cooperation is proud of contributing to the support of small businesses in Ukraine through investment & working capital grants accompanied by entrepreneurial capacity building measures. We are excited to share the experience of Sparkassen with our Ukrainian partners in a joint effort to rebuild Ukraine".
"In the conditions of war, supporting small business financing in the form of grants is the most effective tool, which we combined with bank lending, as well as with interest compensation within the framework of the "Affordable 5-7-9% Loans" Program. Thanks to this, the small entrepreneur received an excellent financial solution for the implementation of his investment plans," emphasized Andrii Gapon, Executive Director of the BDF.