On February 3, 2020, the Government gave a green light to the state program "Affordable Loans at 5-7-9%". This program is designed for the creation and expansion of domestic micro and small businesses at record low interest rate-5,7,9% to the tune of UAH 1.5 million for a term of up to 5 years.

Presenting the program, Prime Minister of Ukraine Oleksiy Honcharuk said that this program is for those who have long dreamed of their own small business, but hesitated to start it for a number of reasons.

"The Cabinet of Ministers is working to reduce loan value and we already have some success. Over the last six months, the cost of loans to banks has dropped significantly, but for large-scale changes, the Government has decided to offset partially the interest rate, so that a person can actually get a loan at 5-7-9% depending on how many jobs will be created. It is important for us to provide entrepreneurs with more resources, more freedom, and more opportunities," Oleksiy Honcharuk stressed.

In 2020, the Government has already allocated UAH 2 billion to the program. This will allow to grant more than 50,000 available credits, to create up to 90,000 new jobs and attract about 2 billion UAH of domestic investments in small business.

"Surveys indicate that one of the biggest barriers to the development of micro and small businesses is a lack of affordable financing, higher interest rates, and higher mortgage requirements. The state program "Affordable Loans at 5-7-9%" aims to solve this problem. The state should support Ukrainians in their aspiration to become business and production owners at home," Minister of Finance Oksana Markarova emphasized in her speech.

Minister of Economic Development, Trade and Agriculture Tymofiy Mylovanov added that economical system targeted at developing and supporting business already exists in Ukraine, the new component of which will be the program Affordable Loans at 5-7-9%: "Its key pillars are information, innovation, and finance - fundamental resources for business. The solutions offered by the whole system or its individual components will be useful for both startuppers and the experienced entrepreneurs".

Government officials underlined that the Government support programs for start-up entrepreneurs will also provide opportunities for free training to enhance their business competencies and improve the prospect of creating a successful business project.

“Anyone who is not willing to take a loan can have free training. Available Loans 5-7-9% program is only the first puzzle of the large state program of accessible lending-2020 on the Year of Ukraine’s Efficiency ”, added Oleksiy Honcharuk.

Background

The State Program "Affordable Loans 5-7-9%” was initiated by the President of Ukraine and the Cabinet of Ministers of Ukraine with the aim of providing broad state support of investment projects for Ukrainian micro and small enterprises.

Three possible lending rates will apply - 5%, 7% or 9% - which will depend on the size of the business (up to UAH 25 million in annual revenue or from UAH 25 to 50 million) and its duration (up to 12 months, more than 12 months). Additionally, the lending rate will be reduced by 0.5% per annum for each employee, but not less than up to 5% per annum.

The actual lending will be performed by the partner banks participating in the program.

Under the terms of the Program, one can obtain a loan of up to UAH 1.5 million UAH for a period of up to 5 years, while credit funding should be directed to participating entrepreneurs exclusively for the purchase or modernization of fixed assets, as well as for the repair or reconstruction of manufacturing areas.

The Government expects that as a result, the State Program "Affordable Loans 5-7-9%" will promote the growth of micro and small businesses, their coming out of the “shadow” economy, creating new workplaces, import substitution and return of migrants. The implementation of the program, on the commission of the Government, will be conducted by the Entrepreneurship Development Fund under the Ministry of Finance of Ukraine.

 One can find more information about the State Program at 5-7-9.gov.ua in Ukrainian.