EBRD pledges new funds for small business support

By Anton Usov

The European Bank for Reconstruction and Development (EBRD) continues to support small and medium-sized enterprises (SMEs) in Ukraine against a backdrop of continued lending constraints for local SMEs. The EBRD is extending a US$ 10 million loan to PJSC Megabank for on-lending to small, privately-owned companies across the country.

This support is vital in Ukraine; although SMEs are responsible for only 15 per cent of GDP (compared to 40 per cent in Turkey and 47 per cent in Poland) long-term financing for such businesses remains scarce.

The project marks the fifth successful transaction since 2007 between the EBRD and PJSC Megabank, in which the Bank holds a minority stake. The two financial institutions have been cooperating in various EBRD programmes: SME lending, energy efficiency investments and the Trade Facilitation Programme.

The EBRD is the largest financial investor in Ukraine. As of 1 August 2013 the Bank had committed over €8.55 billion (US$ 11.4 billion) across 327 projects in Ukraine.