On December 19, 2019 OTP Leasing, the member of Ukrainian Union of Lessors announced about signing 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.
The FinancEast programme is funded by the European Union, which provided EUR 9.5 million of grant funds through the German Development Bank KfW. It will be implemented by the German-Ukrainian Fund.
“Through this grant the European Union hopes relaunching sustainable lending and leasing operations in a region where banks were almost not operational anymore since 2014, supporting sustainable economic and social recovery and thereby contributing to peace and reconciliation in Eastern Ukraine,” said Frederik Coene, First Counsellor, Head of Operations “Local and Human Development”, Delegation of the European Union to Ukraine.
Grant resources will be channeled to SMEs as a subsidy of up to 50% of the investment costs funded by OTP Leasing, Oschadbank, Ukrgasbank. Investment projects will be financed through leasing or loans to purchase agricultural machinery, equipment and vehicles, installation, construction or reconstruction of production assets etc. Starting December 20, entrepreneurs can apply for a leasing or a loan at the regional branches of financial partner institutions.
Andriy Pavlushin, Director General of OTP Leasing has already announced his intention to finance the leasing of tractors and trucks for the small business of Donbas for EUR 12 million – as the first step of the new initiative.
In addition to OTP Leasing, another member of the Association of Lessors of Ukraine – Ukrgasbank – became a participant of this program.
“Today we start implementing the active phase of the FinancEast program, which will give Donbas entrepreneurs access to a variety of financial instruments, including lending. I am sure, this will improve the financial health of their companies, increase their ability to grow, develop and delight their customers with high-quality goods and services,” said Yuriy Heletiy, Deputy Minister of Finance of Ukraine.
“The National Bank supports programs helping to restart lending to the Ukrainian economy and businesses in the eastern regions. We are currently witnessing a surge in lending, especially in the small and medium enterprise segment. Demand for loans from SMEs is increasing every year, while the quality of their debt servicing is significantly higher than in other business segments. We believe that this segment will be a driving force in restarting lending and economic development of the country,” said Kateryna Rozhkova, First Deputy Governor of the National Bank.
More details about the programme can be found at the website.
Background information:
Association Ukrainian Union of Lessors (UUL) was founded in 2005 as a voluntary union of professional participants of the leasing market. The nonprofit Association’s primary objective is to promote development of the open and equal-accessible market of operational and financial leasing in Ukraine by co-ordination of enterprises’ activities in order to protected shared interests. Currently, the UUL unites 27 companies, among them leading leasing companies and representatives of contiguous markets. The UUL is the only professional association in the industry, with members representing approximately 80% of Ukraine’s finance lease market. For additional information about UUL, please contact Maryna Masich, CEO, at: +38 (093) 381 51 00; [email protected]. You may also visit its website at: http://uul.com.ua/
Contacts:
+38 044 529 46 90
+38 093 381 51 00
www.facebook.com/leasingUkraine
The German-Ukrainian Fund was established by the German State Development Bank KfW, the Cabinet of Ministers of Ukraine, and the National Bank of Ukraine.
The EU4Business is an EU initiative that supports a private sector in the Eastern Partnership countries, including Ukraine. It aims to improve a business climate through offering professional advice and access to financing for small and medium-sized businesses. Support under the EU4Business initiative is provided jointly with other organisations. The initiative promotes economic growth and job creation.