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Eng
18 Jan 2021

Raif and EIB Group extend SME support in Ukraine

New agreement on the increase of the financing limit up to EUR 176.3 mio has been signed 

Raiffeisen Bank Aval, European Investment Bank (EIB) and European Investment Fund (EIF), which together constitute EIB Group, extend the cooperation for the financing of new projects in Ukraine.

It became possible due to the signing of the new agreement on the provision of the guarantee to Raif for the support of lending of small and medium business enterprises (SME) in Ukraine with the increase of the limit up to EUR 176.3 mio within the EU initiative EU4Business.

The previous limit amounted to EUR 69 mio and was used by the Ukrainian bank in full for the support of the customers.

Financing provided by EIB Group grants wider access to the finances to the Ukrainian enterprises – representatives of small and medium business by giving a  guarantee in the amount of 70% for each loan and in such a way increasing the volumes of lending on the advantageous terms and conditions, including lowering of requirements to the collateral. Ultimately, it facilitates the increase of workplaces number and creation of new business opportunities in Ukraine.

The guarantee facility is funded by the European Union via Neighbourhood Investment Facility within the initiative EU4Business (“EU for Business”).

The EIB Group joins forces with the European Union to strengthen economic development in the countries that have signed Association Agreements with the EU – namely Georgia, Moldova and Ukraine – by providing financial and technical support targeted at SMEs in these three countries. The EU supports private sector development in the Eastern Partnership countries through its EU4Business initiative by enhancing access to finance for SMEs, improving the business environment and providing advisory services to local businesses.

 

Background information:            

About Raiffeisen Bank Aval:

Raiffeisen Bank Aval is one of the leading banks in Ukraine with 450 branches and 2.5 million customers. The bank has a strong focus on corporate and SME lending and offers a wide range of lending products that includes investment loans, working capital and bank guarantees. The bank is also very active in the agriculture sector which is an important sector in Ukraine and a key priority for the EU4Business initiative.

About EIB:

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

About the EIB in Ukraine:

The EIB finances projects in Ukraine on the basis of the EU External Lending Mandate. This provides the EIB with a guarantee covered by the EU budget for projects of significant interest to the EU and its Eastern Neighbours. The EIB has worked with Ukraine since 2007. The EU bank is committed to supporting Ukraine and helping to create the conditions necessary for the achievement of economic stability. Ukraine has been the main recipient country of EIB support in the Eastern Neighbourhood, accounting for roughly 50% of EIB lending activity. As one of the key International Financing Institutions (IFIs) in Ukraine, the EIB focuses on social and economic infrastructure, transport and connectivity, local private sector development, energy efficiency, climate action and innovation. The Bank supports the private sector primarily through financial intermediation, and also by providing direct loans to selected large companies. Notably, the EIB was the first IFI to make long-term funding in local currency available to a local bank in support of Ukrainian small and medium-sized enterprises (SMEs).

About EIF:

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

About EU4Business:

EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to realise their full potential and boost economic growth. EU4Business support is delivered by the EIB together with and other organisations outside the EU such as the European Bank for Reconstruction and Development. All EU activities that support SMEs in the Eastern Partnership countries are part of EU4Business. For more information, visit: www.EU4Business.eu