Support to the Partial Credit Guarantee Fund (PCGF) under the land reform

Project Description

The PCGF is crafted to strengthen Ukraine's agricultural industry by providing guarantees to local banks. These guarantees cover half of a borrower's responsibilities for investment and working capital loans, specifically benefiting small farmers who either own or operate up to 500 hectares of agricultural land.

Project Objectives

The objective of the Trust Fund is to operationalize the partial credit guarantee GF) to help improve access to financing for small farmers in Ukraine.

The Trust Fund entails two components. 

1st component implemented by the WB – Technical Assistance and capacity building. The technical assistance will focus on three areas: (i) operationalization of the PCGF; (ii) increasing awareness of Ukrainian small farms of opportunities for agricultural and farmland-related investments and access to financial products offered by the banks participating in the PCGF; and (iii) incrementally improving the Ukrainian investment environment that approximates EU standards and enables successful access to banking products by non-bankable small farms.

2nd component implemented by the GoUA – Capitalization of the PCG fund in Ukraine. Financing the capitalization of the new PCGF, with a sound independent governance framework, which will support credit-constrained farmers and significantly improve sustainability of the current credit guarantees, thereby providing the long-term benefits for agricultural development and food security.

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