EBRD lends €20 million in local currency to ProCredit Bank Ukraine

• EBRD provides ProCredit Bank Ukraine with €20 million local currency loan
• Loan will support ProCredit’s on-lending to MSME businesses in Ukraine
• Additional US-funded support provided to businesses investing in new technologies

The European Bank for Reconstruction and Development (EBRD) is lending €20 million in local currency to ProCredit Bank Ukraine (PCBU) to boost the bank’s medium-term lending to Ukrainian private micro, small and medium-sized enterprises (MSMEs), ensuring access to critical funding amidst a continuing challenging war environment. 

PCBU will onlend the proceeds of the loan to its MSME clients, supporting their working capital and investment finance needs to help protect livelihoods and ensure the continued operation of their businesses.

As well as supporting firms impacted by Russia’s war on Ukraine, the loan will contribute to the resilience of Ukraine’s banking sector, since medium-term local-currency funding options remain limited for banks domestically.

Twenty-five per cent of all sub-loans financed from the EBRD’s loan proceeds will be provided to MSMEs for long-term investments in EU-compliant and green technologies, improving the competitiveness of these firms on domestic and foreign markets.

Eligible sub-borrowers will also receive EU-funded technical assistance and US-funded investment incentives on completion of their investment projects under the bloc’s EU4Business initiative.

The loan will be supported by an interest rate subsidy of up to 10 per cent from the US via the EBRD SME Special Fund.

Higher levels of incentives will be provided for businesses and households most affected by the war, as well as for sub-borrowers, facilitating the reintegration into the workforce of war veterans, people living with disabilities, internally displaced persons and/or those located in territories most acutely affected by the war.

ProCredit Bank Ukraine, one of Ukraine’s top 20 banks, is a longstanding client of the EBRD. With MSMEs comprising more than 99 per cent of its client base, the bank is a key partner for the EBRD’s outreach to private business, both through loans and unfunded portfolio risk-sharing instruments.

The EBRD is Ukraine’s largest institutional lender, having deployed more than €8.5 billion in the real economy since Russia’s full-scale invasion in February 2022. The Bank has secured a €4 billion capital increase to continue supporting the country’s economy during wartime and in its future reconstruction efforts.