As of July 1, 2026, the government owed banks 8.8 billion hryvnia in compensation under the “Affordable Loans 5-7-9%” program. These figures were released by the National Development Agency (NDA) in response to a request from “Ekonomichna Pravda.” Andriy Dubas, president of the Association of Ukrainian Banks, explained the reasons behind the rise in debt and the risks it poses to the program.
Debt Trends
According to NUR data, in the first half of 2026 alone, the debt rose from 7.2 billion to 8.8 billion UAH, and over the course of the year—more than sixfold—from 1.4 billion UAH as of July 1, 2025. This marks the first time the trend of previous years—when debt rose at the beginning of the year and declined in the middle—has been broken.
The rise in debt is linked to an increase in the portfolio of preferential loans: while it stood at 150.1 billion hryvnia at the start of 2026, by early July it had reached 189.3 billion hryvnia. In relative terms, the debt-to-portfolio ratio even declined slightly—from 4.8% to 4.7%. The National Bank had previously projected that by the end of 2026, the government’s debt for compensation would reach 10 billion UAH.
Structure of Demand for Subsidized Loans
Andriy Dubas noted that the amount of debt is insignificant compared to the volume of assets managed by the banking sector. At the same time, he drew attention to another problem: two-thirds—and according to some estimates, three-quarters—of new loans under the program are issued with a government subsidy, while some borrowers are capable of servicing the loan at a market rate.
“Currently, both the National Bank and other institutions are discussing the need to narrow the scope of the program—specifically to focus on entrepreneurs who have a genuine need for state support. Businesses that are successful and capable of paying market rates should relieve this burden on the state budget,” Dubas explained.
The compensation mechanism is simple: an entrepreneur receives a loan at a preferential rate of 5, 7, or 9 percent, and the bank receives compensation from the government for the difference between this rate and the market rate (currently 17–19 percent for business loans).
Fees and Oversight
The National Union of Banks (NUB) has refuted claims that banks are imposing additional fees on program participants: all possible fee payments are regulated by the procedure for issuing preferential loans and may not exceed 1.5% of the loan amount. According to the results of audits conducted by the State Audit Service, no instances of additional fees being charged were found.
Program Priorities
According to the AUB President, the program’s priorities include businesses’ energy needs (0% interest loans of up to 10 million UAH for generators and gas piston units), enterprises in high-military-risk zones, the restoration of destroyed property (an interest rate of 0.1% for the first two years), the processing industry, and the climate-oriented agricultural sector.
The program primarily involves state-owned banks, which account for about 60% of the assets of the entire banking system out of 59 operating banks. Private and foreign banks accredited by the National Banking Regulatory Commission (NBRC) as program operators also issue such loans, though their share is smaller. Currently, 13–15 banks are cooperating with international financial organizations, particularly the EBRD. The level of non-performing loans in the banking system as a whole stands at 12.8%, while within the 5-7-9% program, this figure is significantly lower—thanks to additional guarantee mechanisms and incentives for borrowers to comply with the terms, a breach of which would result in a transition
