The Government transferred the full management of the German-Ukrainian Fund (GUF) to the Ministry of Finance of Ukraine. The GUF will become the platform for the small and micro businesses lending program initiated by the President and the Government. The National Bank of Ukraine (NBU) will supervise its work.

"We approved a decision to place GUF under full management of the Ministry of Finance in order to separate management functions and to regularly monitor the GUF’s activities. This will allow to avoid conflicts of interest and to increase the efficiency of use of funds. The experts of the Ministry are able to step up the work of the GUF and provide the country's businesses with the necessary funds for realistic, useful and profitable projects,"Prime Minister Oleksiy Honcharuk stressed.

The founders of the GUF are the National Bank of Ukraine and the Government, represented by the Ministry of Finance. Previously, 50% of the authorized capital of the Fund belonged to the Cabinet of Ministers, the other 50% to the NBU.

After the bill on 'split' was approved the NBU accordingly received the powers to regulate and supervise the activities of non-bank financial institutions to which the GUF belongs, and at the same time, it can't simultaneously be the owner of it.

It should be noted that the Program for support of small and micro businesses was initiated by  President of Ukraine Volodymyr Zelenskyy. The program will begin to function from February 1, 2020, and envisages affordable loans at  5-9% interest rate, for example, the rate at 5% is obtainable for businesses whose revenues do not exceed UAH 25 million and if they create at least two jobs in the country. A 7% rate is meant for businesses with revenues up to UAH 25 million that do not create new jobs (but for every new employee the rate will be reduced by 0.5%!); 9% per year for businesses with revenues up to UAH 50 million. At the same time, the participant invests 20% of own funds from all expenses.

Background

The German - Ukrainian Fund started operations in 1999. It supports the financing of micro, small and medium-sized enterprises in Ukraine by providing loans through partner banks for investments in fixed and working capital. According to the Charter of the GUF, approved by the decision of the General Meeting of Participants of 27.05.2019, the Fund is a specialized financial institution. The authorized capital of the GUF is EUR 10 225 838, which equals UAH 42 911 340. The NBU owns 50% of the authorized capital, while the other 50% is owned by the Ministry of Finance of Ukraine.