The proposed project is a US$ 200 million Framework Facility for on-lending to local banks for financing private sector micro, small and medium-size enterprises. Under the Framework EBRD will provide direct long-term credit lines to local participating banks (PBs) which will in turn lend the funds to micro and small enterprises (MSEs) and to private small and medium size enterprises (SMEs).
The Framework objective is to improve access of creditworthy MSEs/SMEs to sources of reliable finance and to further strengthen the lending capacity and skills of participating banks. The Framework includes technical assistance for institutional building and increased lending capacity of the participating banks.
The main goals of the MSE/SME Framework are to
(i) provide access to medium-term credit to finance MSEs/SMEs
(ii) support the development of the private sector and banking sector in Ukraine.
Transition impact will be achieved by expanding commercially viable MSE/SME finance business in the participating financial institutions and increasing competition thereby demonstrating to other financial institutions that small and medium sized businesses can be a profitable and attractive customer segment.
Leading private banks engaged in MSE and SME lending. The first candidate is Agio. Agio is a small-size bank with total assets of US$ 55.7 mln, total capital of US$ 10.8 million and net profit of US$ 1.2 million as of the end of 2003.
Other local banks engaged in MSE/SME financing and already participating under the EBRD SME II credit line project (Nadra, Forum) will be considered for participation in the near future.
A US$ 200 million MSE/SME Lending Framework Facility for selected banks to be on-lent to the MSE/SMEs.
The first credit line under the Framework will consist of a US$ 10 million SME credit line to Agio Bank.
US$ 200 million.
This operation will be carried out in accordance with EBRD’s Environmental Procedures for Intermediated Financing trough Local Banks and for Small and Micro Loans, including compliance with applicable national environmental, health and safety requirements, adherence to the EBRD’s Environmental Exclusion List and submission of an annual environmental report to the Bank.
The Framework Facility will be supported by the technical assistance aimed at
1) regional expansion of MSE finance into rural areas and the agriculture sector as well as training in-house advisers/trainers in the banks to further roll out and manage MSE lending operations
2) institutional building of participating banks in areas of credit risk management, marketing, IT, Treasury, etc.
The following TC funds will likely be provided
€ 2.25 million from EU TACIS for MSE finance
€ 3 million from the EU IPF 2004 for MSE finance
€ 2.0 million from the Dutch Government for Rural and Agriculture MSE finance
€ 3.0 million from the EU IPF 2004 programme for SME finance
Stanislav Arzhevitin, Chairman.
10, Chervonoarmiyska st.,
Fax : 38 044 234 21 43
For business opportunities or procurement, contact the client company.
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Text of the PIP