Thanks to additional state guarantees for UAH 4 billion, Oschadbank will be able to significantly expand lending to businesses on favorable terms

The Cabinet of Ministers of Ukraine has provided Oschad with additional state guarantees for portfolio bank loans in the amount of UAH 4 billion for 2024, which will be used to lend to micro, small and medium-sized businesses (MSMEs). At the same time, the bank is using the previous limit of UAH 4.65 billion. The new amount of state guarantees will allow Oschad to significantly increase its lending with relaxed collateral requirements.

Since the beginning of the use of the state guarantee instrument on a portfolio basis at the end of February 2021, Oschadbank has provided almost 4,400 loans worth UAH 15 billion to MSMEs under this program. Currently, the total portfolio of the program is UAH 7.5 billion.

Most of the loans were granted to agro-industrial companies, processing, manufacturing and trade enterprises. The majority of borrowers have attracted working capital financing for a term of 2 to 3 years. The average loan amount is about UAH 3 million.

“Oschad continues to support Ukrainian business by facilitating access to financing for entrepreneurs on favorable terms. Thanks to the partial state guarantee of the loan portfolio for borrowers without sufficient collateral and the combination with the “Affordable Loans 5-7-9%” program, loans are provided on very favorable terms,” said Natalia Butkova-Vitvitska, Member of the Management Board of Oschadbank responsible for MSME.

Loans under the program are available to business entities with annual net sales revenue of up to EUR 50 million (equivalent) or up to 250 employees. The maximum loan amount is UAH 100 million for agricultural enterprises, or UAH 400 million for the restoration of lost assets as a result of Russian aggression. The commission for the borrower is up to 1% per annum. The term of the guarantee is not more than 10 years – to secure debt obligations on loans granted for the purpose of restoring fixed assets destroyed partially or completely as a result of military aggression. Under the terms of the program, the borrower must not have any overdue debt to the bank as of the date of the actual loan disbursement.

The government program has significantly reduced collateral requirements – a guarantee can cover up to 80% of the loan amount (for processing companies, agricultural enterprises, or for business recovery).

The borrower must provide the rest of the financing with its own movable or immovable property.

Details of the program are available here.