The European Investment Bank (EIB) and the European Investment Fund (EIF) – jointly the EIB Group – have signed a guarantee agreement with Oschadbank in order to support €50 million of lending to small and medium-sized enterprises (SMEs) in Ukraine made possible with European Union support through the EU4Business initiative.
This agreement will enable Oshadbank to facilitate access to finance for local SMEs by providing a 70% guarantee on each loan and subsequently extend financing on favourable terms, including with reduced collateral requirements. This guarantee transaction is expected to unlock additional financing to small and medium-sized businesses and ultimately to sustain jobs and new business opportunities in Ukraine. The guarantee is funded by the European Union through the Neighbourhood Investment Facility under the EU4Business initiative.
The EIB Group joins forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.
Oschadbank is the universal banking institution providing a wide range of financial products and services in Ukraine, including retail and corporate banking services, domestic and foreign currency transfers and currency exchange. The bank operates domestically through 23 regional branches and over 4,000 operational outlets spread across Ukraine.
"SMEs are the cornerstone of the Ukrainian economy,” said Ambassador Hugues Mingarelli, Head of the EU Delegation to Ukraine. “Today they need better access to affordable and long-term finance in order to continue to grow, to export to the European market and create new jobs across the country. Contributing to improved conditions for access to finance is one of our main priorities under the EU4Business initiative. I am pleased that today we are delivering on this priority."
Andriy Pyshnyy, Chairman of the Management Board at Oschadbank, added: “It is quite logical for Oschadbank to sign this agreement under the EU4Business initiative, since support for SMEs is the priority for the Bank's development.””
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. The EIB works closely with other EU institutions to implement EU policy.
EU4Business helps SMEs in the six countries of the Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to realise their full potential and boost economic growth. EU4Business support is delivered by the EIB together with other organisations such as the European Bank for Reconstruction and Development. All EU activities that support SMEs in the Eastern Partnership countries are part of EU4Business.
