“Unfortunately, the program de facto did not work at full capacity. Prior to the renewal of the program, for three months, all partner banks of the program “Available loans 5-7-9%” issued 451 loans totaling UAH 276 million. This is very little, ” Igor Petrashko , Minister of Economic Development, Trade and Agriculture , recently admitted .
Not available available
It will be recalled that the state credit program “Affordable Loans 5-7-9%” was introduced in February this year at the initiative of the President of Ukraine in order to facilitate access of micro and small businesses to bank lending. Control over the implementation of the program is entrusted to the Fund for Entrepreneurship Development (FRP). The Ministry of Economic Development, Trade and Agriculture supports the program “Affordable Loans 5-7-9%” in terms of educational programs for entrepreneurs who want to become participants.
From the very beginning, four state-owned banks joined the program “automatically”. Of the private commercial banks, only five have joined so far, the largest of which are Raiffeisen Bank Aval (currently the only bank with Western capital), FUIB and TASCOMBANK. Bankers say there is a demand for loans. In particular, PrivatBank has received more than 5,000 applications for consideration since February. But only 1,160 potential borrowers provided complete packages of documents.
The issue is hampered by the fact that initially loans were provided only for the purchase of fixed assets (investment purposes) and as collateral. “And we understand that it (program. – Ed. ) Will not work now, because banks do not want to take risks of issuing funds. That is why portfolio guarantees can become a driving force for lending, ”Mr. Petrashko suggests. Note that the program conditions have been reviewed several times.
In particular, on April 15, the Cabinet of Ministers expanded the state program for businesses with an annual income of UAH 100 million, while previously the corresponding amount was limited to UAH 50 million. In addition, the maximum loan amount under the program was increased to UAH 3 million.
Already on April 29, the government supported the proposal of the Ministry of Finance to clarify the category of businesses that can become participants in the program “Affordable loans 5-7-9%” and remove restrictions on the maximum loan amount for refinancing at zero interest rates.
First, it was clarified that business entities whose annual income did not exceed € 10 million would be able to receive refinancing under the anti-quarantine package at a zero interest rate. The limit on the maximum loan amount for such refinancing was lifted. Only the amount of state support provided to a business entity is limited, which in total cannot exceed € 200 thousand for any three-year period.
Second, borrowers have the opportunity to refinance their existing loans at a rate of 3%, 5%, 7% or 9% per annum (depending on the loan category) for up to five years in the amount of up to UAH 3 million. Both types of refinancing have become available to borrowers who have loans in any bank in Ukraine.
Third, the business was able to issue a deferral of payment not only of the body of the loan, but also interest on its maintenance. Such a delay can be up to nine months and depends on the purpose of providing state support. As we can see, numerous frequent changes make the program even more confusing and incomprehensible.
This does not contribute to its popularity.
Meanwhile, businesses are complaining about the unavailability and high cost of credit.
“Currently, loans cost us about 22% per annum. This article is a significant part of the cost of our products, ”said Dmytro Ostapenko , co-owner of Composite, a company that produces paints. Regarding the affordable lending program, the businessman notes: “There was a lot of PR, but not practice – a complicated procedure for obtaining. I don’t know any companies that would receive funding under this program. “
At the same time, answering the question “what government initiatives can be useful for your business?” in a survey on the BUSINESS website, the majority of respondents point to the government’s loan program “5-7-9%” as a possible support tool. That is, hope is not lost…
Will there be a vacation?
As you know, in late March, shortly after the start of quarantine, the National Bank called on commercial banks to meet the business and restructure credit obligations if necessary. “Debt restructuring requests have reached a maximum since the third quarter of 2017. This factor and the need to replenish inventories and working capital were decisive for the demand from large enterprises in the first quarter of 2020. Instead, the demand for loans from small and medium-sized businesses is declining. to replenish working capital and capital investments ” , – stated in the report of the NBU.
Domestic banks have developed standard credit debt restructuring programs. “In 95% of cases, we provide corporate clients with a three-month grace period to repay the loan. In exceptional cases, we are ready to capitalize interest, ie add them to the amount of principal. But this is possible only if the client has sufficient collateral and a reserve to increase the credit load, ”says Ivan Almyashev , Deputy Chairman of the Board of TASKOMBANK.
At the same time, there are companies that, despite the crisis, continue to meet their obligations in full . “We fulfill our obligations to banks in full. Loans are used to finance long-term leases. That’s why they are involved for three to five years, ”said Valery Ilchenko, CEO of Ilta.
On May 25, PrivatBank announced a reduction in interest rates on all loan programs to finance legal entities and entrepreneurs. Anti-crisis financing conditions for entrepreneurs will be valid until the end of 2020.
“The reduction of credit rates applies not only to new, but also to all existing credit agreements with business clients. For customers who already use the bank’s loan programs, the loan rate will be automatically reduced, ”the statement reads. The reduction in the cost of credit resources is implemented for all small business support programs – both investment loans and working capital leasing and financing programs, except for clients who have a credit vacation / debt restructuring, or who have or will have overdue debt.