Supporting micro lending in Ukraine

The EBRD is sustaining the local development of rural and agricultural lending.

The EBRD’s Ukraine Micro Lending Technical Cooperation (TC) Programme (UMLP) was established in 1998 to help EBRD partner banks providing finance to Ukrainian micro and small enterprises (MSEs) with a range of consultancy services supporting banks’ institutional strengthening and capacities for MSE lending.

The government of the Netherlands has generously financed UMLP since 2004 and provided €3.66 million in support of its expansion into the regions of the country with particular focus on rural and agricultural segments.

With the support of this TC funding, partner banks have established more than 250 specialised rural and agricultural lending units and disbursed nearly 81,000 rural and agricultural loans for US$ 490 million. Over 200 cities were covered and more than 500 specialised bank staff were trained in agricultural lending.

Responding to the financial crisis

In 2009 as a consequence of the economic downturn determined by the financial crisis, the UMLP partner banks substantially contracted lending operations. To respond to banks’ emerging needs and to expand rural lending in Ukraine, the Netherlands has extended its TC contribution agreement to May 2010. The technical assistance has focused on crisis-related topics, providing consultancies and trainings on issues such as portfolio quality management, improving risk management, dealing with loan work-outs and managing staff reduction issues.

Rural and agricultural lending

TC service was also provided to further rural and agricultural lending outreach, paying particular attention to crisis response measures and proposing innovative solutions through seminars and workshops for staff of all levels.

As a result by the second half of 2010 the loan portfolio quality of UMLP partner banks has improved substantially.