EBRD provides local currency credit line in Ukraine

By Anton Usov

EBRD provides local currency credit line in Ukraine

Русский перевод

Loan to OTP Leasing Ukraine to support local SMEs and boost domestic leasing

The EBRD is providing a local currency loan in Ukraine in the amount of UAH 514,000,000 (US$ 20 million equivalent) to OTP Leasing (OTPL).

The funds will help OTPL to expand its operations in local currency to small and medium-sized enterprises (SMEs) across the country and to manage its balance-sheet currency structure. The use of local currency will give great comfort to potential borrowers, who will not be exposed to foreign exchange risks.

OTP Leasing, a limited liability company incorporated in Ukraine and beneficially owned by OTP Bank plc of Hungary, has been a well-established market player for almost a decade. The EBRD loan will contribute to OTPL’s development strategy, designed to diversify its customer base and target smaller agricultural producers with land banks exceeding 5,000 hectares. 

Sevki Acuner, EBRD Director for Ukraine, said: “Ukraine’s leasing market has contracted severely in recent years and at the moment it represents less than 1 per cent of GDP, compared with up to 14 per cent of GDP in neighbouring countries such as the Czech Republic, Hungary or Poland. Therefore the loan agreement with OTP Leasing is very important, not only financially but also in terms of market confidence and development. The project promotes local currency lending in Ukraine, which should strengthen, in particular, the market position and competitiveness of domestic small and medium-sized companies.”

“The financial programs of the EBRD fully conform to our strategies. OTP Leasing has been actively implementing the Auto-Factory and Agro-Factory projects, wherein we provide small and medium-sized enterprises with financing for up to UAH 2 million. We are encouraged by the recent brisk activation of small and medium businesses with a growing demand and extending terms of transactions. Using the EBRD financing and our partner programs with suppliers, we can offer final customers to lease machinery and vehicles under special conditions for 12-13% in UAH for 3 years,” Andrii Pavlushyn, OTP Leasing CEO, added.

The strategic line of financing small and medium-sized businesses has been set up as the business model for the entire OTP Group in Ukraine captained by OTP Bank PJSC.

"We have repeatedly emphasized that OTP Bank is focused on the needs of SMEs. We have developed a whole range of products and services: from special overdraft and tariff packages to an integrated loan project called OTP Agro-Factory. And now, we are talking about a vivid embodiment of our strategy, that is fresh investments in the development of Ukrainian SMEs totaling UAH 1 billion," said Tamas Hak-Kovacs, Chairman of the Board of OTP Bank PJSC.

In addition, under the EBRD’s new transition concept, the Bank aims to promote the six transition qualities, defining successful and sustainable market economies as competitive, well-governed, green, inclusive, resilient and integrated.

The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of almost €12.2 billion through 377 projects since the start of its operations in the country in 1993.

OTP Leasing LLC is a universal leasing company that is part of the European financial group OTP Group, which for decades enjoys a solid reputation throughout Europe. OTP Leasing was founded in June 2008 as a subsidiary of OTP Bank PJSC. OTP Leasing operates in all segments of the market with leading manufacturers of machinery, special equipment and vehicles, providing leasing services.

Public Joint Stock Company OTP Bank is one of the largest domestic banks, a recognized leader in the financial sector of Ukraine. The Bank provides a full range of financial services to corporate and private customers, as well as to small and medium enterprises. The bank entered the Ukrainian market in 1998, and since then it enjoys a staunch reputation of socially responsible, reliable and stable institution providing its consumers with services of European quality standard. Its 100% owner is OTP Bank Plc., the largest Hungarian bank.

In Ukraine, OTP Bank PJSC is captaining a financial group, which includes OTP Capital Asset Management Company and OTP Leasing LLC.