Prozorro.Sale launches factoring service for SMEs with support from Ministry of Economy
On 30 October 2024, a pilot project of a factoring service developed by Prozorro.Sale JSC with the support of the Ministry of Economy was officially launched. It is part of the implementation of the Strategy for the Development of Small and Medium-Sized Businesses until 2027, developed and approved by the Ministry of Economy.
The digital product is designed to solve the problem of cash gaps and provide small and medium-sized enterprises with an alternative source of financing for their operations. Thanks to factoring, entrepreneurs participating in public procurement can quickly receive funds without collateral.
“The development of small and medium-sized businesses is one of the key priorities of the state. Thanks to this service, the customer receives more potential suppliers, higher competition and better prices. At the same time, businesses can receive working capital earlier and invest it in further development or production scaling. Prozorro.Sale will provide a convenient way to create an application for factoring and wide access to the best offers from factor banks,” said Yuliia Svyrydenko, First Deputy Prime Minister and Minister of Economy of Ukraine.
“For decades, factoring has been helping small and medium-sized businesses replenish their working capital abroad. The Prozorro.Sale team was tasked with developing a convenient, simple, digitalised service for entrepreneurs participating in public procurement.
Unlike a loan, factoring does not require a separate collateral and allows you to receive funds for the completed supply based only on the contract documents. It is fast, convenient and affordable. Factoring will help develop the economy and implement the strategy of the Ministry of Economy to support small and medium-sized enterprises,” said Hryhorii Lehenchenko, member of the Board of Prozorro.Sale.
Currently, the public procurement market is worth UAH 10-20 billion a year, of which factoring is an important tool for at least 3-5%. The private procurement market accounts for another UAH 11-23 billion, for which the factoring service will also become available in the future.
The project partners are Oschadbank, PUMB, UGB, and Ukrposhta.
The factoring service was implemented with the support of the Ministry of Economy, with the expert assistance of the Ministry of Economy, the International Finance Corporation (IFC, a member of the World Bank Group) in partnership with the Swiss State Secretariat for Economic Affairs (SECO).
Background
Prozorro.Sale is a joint-stock company 100% owned by the state, represented by the Ministry of Economy.
JSC Prozorro.Sale operates an electronic trading system where online auctions for the sale and lease of public assets, including agricultural land, are held. Prozorro.Sale guarantees the security of the auctions, the impossibility of interference in their course and equal access of each participant to participate in the auction, as well as the ability of anyone to monitor online auctions and their results in real time.