On 25 January, the European Union and the World Bank Group, together with the Government of Ukraine, launched the Partial Credit Guarantee Fund in Agriculture (PCGF).
The PCGF will offer guarantees to Ukrainian banks, covering up to 50 per cent of a borrower’s obligations, for both investment and working capital loans, with the aim to support small farmers who own or use up to 500 hectares of agricultural land.
Eligible borrowers can receive loans for up to three years for working capital, up to seven years for investment financing, and up to 10 years for the purchase of land, with a maximum loan amount equivalent to $800,000 per borrower.
Small farmers who are registered in the State Agrarian Registry will be able to access the Fund guarantees and benefit from other state programmes. These include, for example, affordable loans, like the ongoing 5-7-9 Loan Programme for agricultural production and food processing.
“To solve the broad financial needs of small farmers amidst Russia’s invasion of Ukraine, the Fund is going to address crucial issues such as agricultural land acquisition, agriculture machinery and equipment financing, and operational needs of small farms,” said Gevorg Sargsyan, World Bank Country Manager for Ukraine.
“The European Union has been supporting the development of a comprehensive and inclusive land reform for Ukraine over the last eight years,” said Alberto Fernández-Díez, Head of the Trade and Economic Section at the EU Delegation to Ukraine. “Now, in the face of the significant damage Russia is inflicting on Ukraine’s agriculture, an improved access to finance for small farmers is essential for the country’s economic resilience and global food security. What is more, this approach is fully aligned with the EU’s Common Agriculture Policy and also allows Ukraine to prepare its accession to the EU.”
