German-Ukrainian Fund (hereinafter - GUF) revives active lending to SME. Thus, last week GUF signed with Oschadbank JSC the Memorandun on Strategic Partnership and Cooperation, stipulating that the bank is to be provided with low-cost financial resources for further lending to SME investment projects.
“NBU aims at promotion of lending revival in Ukraine; this task will be reflected in updated Comprehensive Program for the Development of Ukraine’s Financial Sector till 2020. In this light, granting Oschadbank JSC with the status of partner bank of the Fund provides opportunities to revive bank’s lending to Ukrainian entrepreneurs at cost of GUF funds provided by Germany throgh the KfW. We expect that soon the similar lending programs will be signed with other banks,” mentioned Mr Oleh Strynzha, Director of Financial Controlling Department of the NBU and Executive Director of GUF.
According to Mr Oleh Strynzha, due to development of microfinance procedures and technologies in result of technical assistance program provided by the Memorandum, the costs of decisions on lending to SME will be lower.
“Demand for lending in SME sector grows, however, today less than ten banks perform active lending to SME after economic shocks. At the same time, their portfolios grow by 20%-30% annually. Proper business organization and prudent credit policy provided, currently SME sector for the commercial banks is one of the most attractive under conditions of deficient laws on creditors’ rights protection and non-reformed state of the judicial system,” stressed Executive Director of GUF.
As Mr Oleh Strynzha emphasized, macroeconomic stabilization and NBU key policy rate cuts had effective impact on decrease of interest rates in the interbank lending market that allows banks to make costs of lending lower, opening with that opportunities for lending more potential borrowers. In 2016, lending rates in SME sector decreased from 25% per annum to 18%-19%, and this trend is to be continued in 2017 along with further inflation drop accroding to objectives of the NBU monetary policy.
German-Ukrainian Fund (GUF) is a non-bankinf financial institution established according to the Decree of the President of Ukraine dated 01.06.1998 June 19.04.1999 No. 574/98 On German-Ukrainian Fund and Regulation of the Cabinet of Ministers of Ukraine dated 19 April 1999 No. 628.
Its objective is to promote micro-, small and medium enterprises through granting loans via Ukrainian banks. GUF participants are the Natioal Bank of Ukraine (31.3%), the Ministry of Finance of Ukraine (31.3%) and German depository institution for rebuilding (Kreditanstalt fuer Wiederaufbau - KfW) (37.45). Funding of GUF programs and projects is performed at costs of the German Government through German public bank for development (Kreditanstalt für Wiederaufbau (KfW)).
Funds-management of GUF is carried out by the International Financial Cooperation Project Administration Office. It was established under Ministry of Finance of Ukraine for the effective implementation of investment projects, and projects of international technical assistance provided to Ukraine by international financial organizations.