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 Maintaining the discount rate at 13% guarantees the preservation of the most loyal conditions for small and medium-sized businesses under government loan programs, and also provides for their further improvement. This opinion was expressed by Oksana Shulga, Director of the Small and Medium Business Department of GLOBUS BANK.

 

 

 

 

“The impact of inflation on the economy is currently under control. Against the backdrop of positive news about the $50 billion loan from the G7 countries, it will actually support the economy and allow us to focus on its further development, including government loan programs for small and medium-sized businesses. And most importantly, Ukrainian entrepreneurs have gotten rid of some of their natural fears about what will happen in 2025, returning to the plane of developing their own business,” the expert emphasized.

 

 

 

 

The expert said that from January to November, more than 65% of all loans to small and medium-sized businesses were issued under government programs, and about 35% were targeted loans from commercial banks for the purchase of fixed assets.

“Just like last year, it is government loan programs that stimulate the development of bank lending, which is extremely important in the difficult conditions of war,” the banker emphasized.

She highlighted several key areas of state credit support for small and medium-sized businesses.

1. Government programs that provide for interest rate compensation.

• “Affordable Loans 5-7-9 is the main program of state credit support for small and medium-sized businesses. This program accounts for more than 80% of all loans issued under government programs. Since the beginning of the full-scale invasion, more than 64 thousand loan agreements have been concluded for a total amount of over UAH 250 billion. And since the beginning of 2024, the number of loans issued under the 5-7-9 program has amounted to more than 20 thousand, which is 50% of the figures for 2022-2023.

“According to the Entrepreneurship Development Fund, due to the expansion of the terms of the 5-7-9 program to include energy loans for SMEs, in particular for the purchase and installation of solar power plants, more than 1,100 energy loans were issued to entrepreneurs from the end of August to November, which is about 20% of the total number of loans issued under the 5-7-9 program during this period,” the expert emphasized.

• “Affordable Financial Leasing 5-7-9” provides an opportunity to lease agricultural machinery, commercial vehicles, etc. at preferential rates. The terms of the program stipulate that the state will compensate the basic interest rate up to 5%, 7% or 11% per annum.

“This program is quite promising, as banks have actively started to develop it, offering very favorable conditions for borrowers, for example, agricultural enterprises can get a leasing object at 5% per annum. It is worth noting that municipal and state-owned enterprises prefer to purchase equipment on lease rather than on credit,” says Oksana Shulga.

• “Affordable Factoring provides micro, small and medium-sized businesses with an unsecured deferred payment loan at a compensation rate of 13% per annum for up to 360 days.
  “Thanks to this tool, entrepreneurs can get the necessary working capital to run/expand their own business,” she said.

2. Loan programs are implemented through the efforts of state funds and relevant ministries.

• Programs for condominiums and housing cooperatives “Energodom” and “Grindim” from the Energy Efficiency Fund, which provide reimbursement in the amount of 50% to 70% for the necessary work on energy modernization and energy independence of buildings, and under these programs, borrowers have the opportunity to receive an unsecured and down payment-free bank loan of up to UAH 3 million for up to 5 years at 13.5% per annum under the Energy Infrastructure Restoration program, which operates under the Memorandum of Bank Lending for Energy Infrastructure Restoration Projects;
• Energy Service Companies (ESCOs) Support Program from the Entrepreneurship Fund, funded by the United Nations Development Program - an opportunity to obtain a loan of up to UAH 3 million for a maturity of up to 5 years at 7% per annum.

3. Participation of local state administrations in the implementation of certain government programs, which can additionally compensate for the interest rate, part of the loan, and reimburse part of the cost of the purchased equipment.
According to the expert, it is important to combine several programs at the same time, for example, as is the case with lending to energy service companies.

“The mix of conditions of the UNDP financial support programs, “Affordable Loans 5-7-9%” and the provision of guarantees by the Entrepreneurship Development Fund for lending to ESCO companies that will carry out energy modernization of public buildings in small and medium-sized cities of Ukraine, significantly reduce the borrower's loan costs, which automatically increases the interest of this business segment to participate in the energy modernization of public buildings, especially in small cities. The borrower has the opportunity to receive compensation of 20% of the amount of the energy service contract through financial support from UNDP under the project “Removing Barriers to Promoting Energy Efficiency Investments in Public Buildings in Small and Medium-Sized Cities of Ukraine through the ESCO Mechanism,” the expert said.

The banker predicts that by the end of the year the number of new loans for SMEs under government programs will exceed 3 thousand loans per month, and by the end of 2024 the number of loans issued under government programs may exceed the figures for 2023 by 40%.

“Government programs are a real driver of lending development, as they have helped banks' loan portfolios grow by an average of 50-80% since the beginning of 2024. In addition, these programs are constantly being improved, their conditions are improving for borrowers, which encourages entrepreneurs to take out loans more actively and develop their own business,” Oksana Shulga summarized.