On 14 December 2018, the German-Ukrainian Fund (GUF) and Lviv Bank signed a partnership agreement on a joint funding support programme for small and medium enterprises (SME), as well as loan agreements for Ukrainian SMEs in the amount of € 3 million, part of which will be provided in the national currency under the EU4Business initiative.
"The German-Ukrainian Fund is pleased to expand the number of partner banks and to welcome on board Lviv Bank, which has a clear focus and best practices in lending and working with SMEs. This will allow the GUF to significantly expand the scope of SME funding support in the Western region of Ukraine," said Oleg Strynzha, Executive Director of the GUF.
In accordance with signed loan agreements, Lviv Bank will provide loans to SMEs under the Micro-Lending Programme and a new programme aimed at supporting SMEs in their investment projects implemented in cooperation with the EU4Business initiative of the European Union.
Under the SME Investment Support Programme, loans will be provided to enterprises in agriculture, as well as in the processing industry, hotel and restaurant sectors, and to those implementing energy efficiency projects. SME investment projects under this programme will be financed in the national currency for a term of up to six years, at an annual interest rate of 16%, and in hard currency for a term of up to five years at an annual rate of 7.5%.
"Lviv Bank is actively developing, and we are very happy about the new partnership between Lviv Bank and the German-Ukrainian Fund. The signing of this agreement once again confirms the trust of international partners in our bank. With this programme, we will be able to finance the clients in business and agriculture under even better conditions, pursuing our goal of becoming a reliable financial partner for businesses and agricultural producers in the west of Ukraine. We are convinced that the development of small businesses is at the heart of the whole country's economic development," commented Ashot Abraamyan, Chairman of the Board of Lviv Bank.
"Within the framework of the new SME Investment Support Programme leveraged by the European Union's financial assistance and loans from the German Government, we have succeeded in implementing an effective support model for SME financing, offering affordable, long-term loans in the national currency," said Valeriy Mayboroda, acting head of the GUF.
The future borrowers of Lviv Bank will also profit from reduced interest rates on their investment loans through the cooperation of the GUF with local authorities. Currently, there are joint programmes with the Kyiv City State Administration and the Ternopil Region State Administration, providing 50% compensation of interest from local budgets. Similar programmes are planned to be launched in the Kharkiv, Cherkasy and Rivne regions in the near future.
The German-Ukrainian Fund was established by the Cabinet of Ministers of Ukraine, the National Bank of Ukraine and the German Development Bank (KfW). The GUF is under operational management of the Office for Administration of International Financial Collaboration Projects, an institution of the Ministry of Finance of Ukraine.