GUF, Kyiv City Administration want to sign agreement on beneficial lending to Kyiv-based SME
KYIV. Sept 5 (Interfax-Ukraine) – The German-Ukrainian Fund (GUF) and Kyiv City Administration have intents to sign an agreement on beneficial lending to small and medium-sized enterprises (SME) located in Kyiv, Deputy GUF Head Valeriy Maiboroda has said.
"During the first financial fair held in Kyiv in April this year we signed an agreement of cooperation with the Kyiv City Administration, in particular on compensation of credit rates under our SME lending program. We worked out a document together during the summer. We hope that it will be accepted by the City Council and at the end of the month or early October we will present our project of cooperation with the Kyiv City Administration," he said at a press conference at Interfax-Ukraine on Tuesday.
According to Maiboroda, this cooperation will significantly increase the accessibility of SME in Kyiv to credit resources.
"Under this program, Kyiv entrepreneurs will be able to receive financial resources within our SME support program, but at the credit rate that would be half of the rate envisaged program: if now it is 15% per annum, then Kyiv entrepreneurs will be able to raise hryvnia-pegged loans at 7.5% per annum," he said.
GUF Executive Director Oleh Strynzha said that the fund has a great potential for expanding cooperation with other entities.
"With the support of our partners - the German State Development Bank (KfW) and the European Union - we have every opportunity of repeating the success of similar funds in neighboring countries, where their loan portfolios are EUR1-2 billion, while our current portfolio is EUR40 million," he said.
In the near future, GUF will also present a strategy for the next three years, which provides for a significant increase in lending under these programs.
At the same time, Strynzha said that the decision needs to reduce the currency risk when attracting funds from outside for the programs.
"This is an important issue. It has been resolved for the existing GUF program, but it must be resolved for an entire system of attracting external long-term loans so that we can attract foreign exchange resources for a long period of time, have the currency swap with the National Bank or other banks, access to the long-term hryvnia and provide resources in hryvnias directly to the GUF partner banks. When developing our strategy, we want to initiate a discussion to address this issue," Strynzha said.