On 13 June, the Cabinet of Ministers of Ukraine adopted a resolution “On the provision of state guarantees on a portfolio basis in 2023”.

The draft resolution was prepared by the Ministry of Finance with the aim of increasing access to lending for micro, small and/or medium-sized enterprises (MSMEs) that do not have sufficient collateral for banks, by providing a partial state guarantee for a portfolio of loans to such borrowers.

The Government’s decision establishes the possibility of providing state guarantees to 9 lending banks that have been selected to receive partial state guarantees for their MSME loan portfolio, as well as the maximum amount of such guarantees.

Based on the applications received from the banks, the maximum amount of state guarantees on a portfolio basis was approved for a total amount of UAH 7,794 million.

Background

The Budget Code of Ukraine provides for the possibility of providing state guarantees based on a decision of the Cabinet of Ministers of Ukraine to ensure partial fulfilment of debt obligations under a portfolio of loans granted by lending banks to micro, small and/or medium-sized enterprises resident in Ukraine, up to a maximum of 80% of the total amount of such debt obligations under the loan portfolio and 80% for each individual loan.

The procedure for selecting lending banks, the conditions for providing state guarantees on a portfolio basis, and the fee for providing such guarantees have been approved by Resolution of the Cabinet of Ministers of Ukraine No. 723 “Some issues of providing state guarantees on a portfolio basis” dated 14 July 2021.