Ukrainian businesses that want to enter the global market will have to invest a lot in its development. Resources will be required to study foreign markets, visit other countries, adapt their products to the needs of the market, search for partners and promote the goods. This was discussed at a conference for entrepreneurs that took place in Odessa – “Business together with the EU: how to enter the European market”. Delo.UA collected tips for businesses on how to find resources that will help business to develop.
European Union programmes
In Ukraine, the EU4Business initiative is aimed at supporting small and medium-sized enterprises, co-financed by the European Union and implemented by the European Bank for Reconstruction and Development, the European Investment Bank, the German Development Bank, OECD, the International Trade Centre, the World Bank and other partners. It has been operating in Ukraine for almost 10 years. The EU4Business initiative consists of many projects and programmes for businesses.
“The European Union provides support in four areas: SME financing, SME consulting assistance, assistance in accessing external markets, and support for regulatory policy reform,” says Anna Bondarenko, a communications expert at EU4Business.
One of the recent EU4Business programmes is to create a network of Business Support Centres. The centres have already been established in 15 cities in various regions. “A large share of the financing of SME consulting assistance programmes from the European Union is aimed at their work,” Bondarenko said. “Among other things, the centres help Ukrainian businesses attract consultants and financing. Overall, they provide all the necessary information”.
Business support centres conduct a lot of trainings and conferences for business in the regions. “These are mainly industry events,” Anna Bondarenko says. “For example, one can learn how to properly prepare documents in order to win a European grant. Or learn from specialists in management, marketing and HR.”
Assistance from consultants
Applying to one of the regional offices of the EBRD or the Business Support Centre, a Ukrainian company can get a grant to attract a business consultant, says Artem Vashchilenko, Executive director of the Nikolaev Business Support Centre.
A consultant can be invited for a variety of tasks, Vashchilenko says, to develop a strategy, analyse the energy efficiency of production, prepare the company for exports, find partners on foreign markets, and prepare standard export contracts.
To obtain a grant for getting a consultant, a company needs to contact one of the EBRD regional offices, or one of the regional Centres. A company should formulate what kind of expertise and in what area it is needed. A consultant can be selected from a list of specialists accredited by the European Bank for Reconstruction and Development.
“In fact, a company can choose any consultant from 300 accredited specialists,” Artyom Vashchilenko explains – either Ukrainian or European consultants. “At the same time, a company can offer its own specialist, but he/she will need to be accredited by the EBRD.”
The company will need to pay a consultant’s services by itself. However, thanks to the support of EU4Business, a company can receive compensation of 50 to 70% of the cost of a consulting project. The maximum amount that can be covered by a grant from the EU is 10,000 euros.
One of the latest EU4Business initiatives is a joint programme with the German-Ukrainian Fund. Under this programme, small and medium-sized enterprises can obtain cheaper loans.
The German government provided 10 million euros for lending to Ukrainian businesses for this programme, and the European Union another 5 million euros to compensate for currency risks. “That is, the banks and immediate borrowers received a cheaper resource in the total amount of 300 million hryvnyas,” explains Valery Mayboroda, acting head of the German-Ukrainian Fund.
Within six months, 78 Ukrainian enterprises received loans under the programme, for the amount of 240 million hryvnyas.
“It is very important that 40% of them are investment loans, destined mainly for the purchase of equipment for Ukrainian production,” Mayboroda says.
According to him, Ukrainian businesses can obtain loans at a preferential rate of 15% per annum, while the average market rate is 18-20%. Such a loan can be obtained for up to six years. It can be received in one of the six partner banks of the Fund – ProCredit Bank, Ukrgasbank, Oschadbank, Creditvest Bank, Megabank or Kredobank.
“The rate at the 15% level is still high for Ukrainian businesses,” Valery Mayboroda says. “We managed to unite the efforts with the Kyiv city state administration. It compensates businesses for the interest rate. Through joint efforts, we are managing to lend to businesses from Kyiv at 7.5 or 10%.”
The German-Ukrainian Fund has already signed agreements with the authorities of the Kharkiv, Cherkassy and Ternopil regions on similar programmes. “We have sent proposals to another 15 regions and are waiting to see what happens,” Mayboroda summarises.
Thus, the European Union supports many programmes that help Ukrainian small and medium-sized enterprises to develop.
The material was prepared by Delo.UA following the results of the conference “Business together with EU: how to enter the European market.” (Odessa, 8 June)