The Government has changed the terms of the “Affordable Loans 5-7-9%” programme
2 May 2024 11:22
The Cabinet of Ministers has amended the Procedure for Providing Financial State Support to Business Entities, which defines the parameters of the Affordable Loans 5-7-9% programme. This was reported by the Ministry of Economy, "Komersant Ukrainian" reports
“The state has a limited resource of cheap money to support business. And we want to use it as efficiently as possible. As the National Bank gradually reduces the discount rate, working capital becomes more accessible on market terms. Accordingly, the Government is modernising the 5-7-9% programme to refocus this type of state support on investment lending. Attracting investment in the real sector is one of the key areas of the “Made in Ukraine” policy,
– said Deputy Minister of Economy Nadiia Bihun.
What has changed in the programme “Affordable Loans 5-7-9%”
The maximum loan amount for working capital financing has been reduced to UAH 5 million.
The limits for investment purposes remain unchanged, in particular, for processing enterprises they amount to UAH 150 million .
In addition, the Government changed the lending limit for the livestock sector, increasing it to UAH 150 million.
At the same time, the Government has changed the parameters of the programme that affect banks’ profits. The margin of banks working with borrowers under the “Affordable Loans 5-7-9%” programme was limited. This will free up UAH 3 billion and direct these funds directly to business lending.
It should be noted that in the context of Russia’s full-scale armed aggression against Ukraine, destruction and economic decline, the government programme “Affordable Loans 5-7-9%” was in fact the only effective tool for financial support for small and medium-sized businesses.
Last year, 90% of new business loans in the country were issued under the 5-7-9% programme. However, the share of loans for investment purposes under the programme was only about 12%.
Due to the large size of the 5-7-9% programme, the state does not have enough funds to cover all the preferential interest, so the Entrepreneurship Development Fund (EDF) owed banks UAH 7 billion as of the beginning of 2024.
