EU-promoted Risk Sharing Facility to offer new business opportunities
Loans to small and medium-sized enterprises (SMEs) in Ukraine and to selected larger companies, as well as for renewable energy projects, will become available to a greater number of domestic firms following the signing of a Risk Sharing Facility (RSF) between the EBRD and Raiffeisen Bank Aval in Kiev today.
Under the programme, the EBRD will share the risk on individual loans made by Raiffeisen Bank Aval to SMEs in the total amount of up to €20 million over a period of three years. The RSF will help increase the size and tenor of loans to businesses across the country. This will be achieved through the enhanced risk-taking capacity of Raiffeisen Bank Aval in partnership with the EBRD.
Borrowers under the RSF will benefit from various technical cooperation programmes, including a comprehensive package of technical assistance available through the EU4Business programme, financed by the EU and managed by the EBRD. In particular, Ukrainian firms will tap into the best international expertise available in areas such as financial management, IT development, and the optimisation of production and management processes.
Volodymyr Lavrenchuk, CEO of Raiffeisen Bank Aval, noted: “We are pleased to announce the start of our cooperation with the EBRD within the framework of another important project, which widens our capacity for long-term financing and technical support of medium-sized businesses. Last year, we issued loans to more than 1,100 companies, including 300 new clients. The programme is an opportunity to double our support for Ukrainian companies in their business development. This sphere has been and remains one of the priorities of our bank.”
Sevki Acuner, EBRD Director for Ukraine, said: “We would like to welcome our long-term partner Raiffeisen Bank Aval to the EBRD’s Risk Sharing Facility. I am sure that this project will contribute to the development of SME lending and the growth of the banking sector in the country. It will improve access to finance for Ukrainian companies, upgrade their business practices, and help to share risk among responsible lenders.”
The EBRD is the largest international financial investor in Ukraine. To date, the Bank has made a cumulative commitment of almost €12.1 billion across some 400 projects since the start of its operations in the country in 1993.
Raiffeisen Bank Aval was founded in 1992. Since October 2005, it has been part of the Austrian banking group Raiffeisen Bank International AG. As at 30 September 2017, Raiffeisen Group owned 68.28 per cent of the shares of Raiffeisen Bank Aval, and the EBRD held 30 per cent.
Raiffeisen Bank Aval offers a wide range of services to more than 2.5 million clients through its nationwide network, which at the end of September 2017 totalled almost 500 branches across Ukraine.