- New €40 million equivalent risk-sharing facility to bolster smaller enterprises
- IFC to share 50 percent of potential losses on the facility portfolio, thanks to support of EU's EFSD Guarantee
- Investment to help preserve jobs, boost exports, and increase fiscal revenue
Paris, France, December 21, 2023—IFC, EU and Credit Agricole Ukraine announced today a new €40 million equivalent risk-sharing facility to boost access to finance for Ukraine's small and medium enterprises (SMEs), crucial for the country's economic resilience.
The risk-sharing facility, for which IFC will contribute a local currency equivalent of €20 million with EU support, will provide critical financial support to smaller businesses, including agricultural and rural SMEs. The bank currently serves over 400,000 clients across Ukraine.
Katarína Mathernová, Ambassador of the European Union to Ukraine said: "As the backbone of the Ukrainian economy, small and medium size enterprises play a key role in recovery, reconstruction and modernization efforts. With this new risk-sharing facility, the EU is stepping up its support to address the needs of Ukraine's businesses and boost investment in the country."
"As a reliable financial partner for business, Credit Agricole has mobilized to support its clients from the first days of the wartime. We are active participants of state programs to provide affordable financing to businesses, and as of today, we will offer our business clients the opportunity to benefit from our common loan program with IFC. We believe this program will help preserve jobs, boost exports and support small and medium-sized enterprises", said Carlos de Cordoue, Chairman of the Management Board of Credit Agricole Ukraine.
Ukraine's SMEs are increasingly vulnerable due to the highly risky and uncertain business environment. In 2021, they comprised 99.97 percent of all businesses in Ukraine, accounting for approximately 60 percent of GDP and employing over 7 million people. Ukraine's SMEs face significant challenges, operating at an average pre-invasion capacity of 44 percent.
"Strengthening access to finance for entrepreneurs is essential for Ukraine's economy," said Alfonso Garcia Mora, IFC's Regional Vice President for Europe, Latin America, and the Caribbean. "Partnering with the EU and Crédit Agricole creates new opportunities for Ukrainian business amid these challenging times."
This is the third transaction under IFC's Small Loan Guarantee Program, supported by the European Commission via the European Fund for Sustainable Development (EFSD). The project is a part of IFC's $2 billion Economic Resilience Action program to support Ukraine's private sector. It complements the World Bank Group's joint efforts to help businesses stay afloat and enable the government to provide essential services and make critical repairs.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
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About the European Fund for Sustainable Development Plus
The European Fund for Sustainable Development Plus (EFSD) is part of the EU's investment framework for external action. The EFSD guarantees are offered on favorable, highly competitive conditions. They allow private investors to finance projects in more challenging markets, by assuming the risks of more unstable environments while avoiding market distortions. Because the EFSD covers a share of the risks, the EU's development finance partners can match the EFSD guarantees with their own resources, which in turn will attract additional investors.
The Small Loan Guarantee Program (SLGP) is supported by a first loss guarantee from the European Union under the EFSD. SLGP provides SMEs with access to financial services as well as risk-sharing support to encourage financial institutions in partner countries to expand their SME lending portfolio, with a particular focus on the harder-to-reach smaller SMEs.
About Credit Agricole Ukraine
Credit Agricole Ukraine is the oldest foreign bank in Ukraine providing the entire range of banking services, is strategic partner to agribusiness, corporate clients and one of the leaders in the car loan market. The bank belongs to the international Credit Agricole Group (France), the European leader in bank assurance and asset management and a major partner of the French economy. Since March 2023, the bank has been included in the list of systemically important banks, which indicates the importance of Credit Agricole for the Ukrainian economy. The bank is among the TOP-10 in the Ukrainian market according to the amount of net assets. Even in war time Credit Agricole Ukraine continuous stable work, providing services for customer and contribute to Ukrainian economy. Being a socially responsible bank, the bank has allocated UAH 92 million to charity since the war started.
For more information visit www.credit-agricole.ua/en
