The European Fund for Southeast Europe (EFSE) is expanding partnership with ProCredit Bank Ukraine by providing a new local currency loan in the amount of USD 10 million equivalent in Ukrainian hryvnia (UAH). Notably, this is the first UAH-denominated facility in Ukraine, which was hedged with the Amsterdam-based Currency Exchange Fund (TCX), and thus a market-enabling transaction that opens the door for donors, investors and other external lenders to provide hedged funding in the much needed local currency in Ukraine.
The new facility will support ProCredit Bank Ukraine to increase its outreach and scale with small and medium enterprises (SMEs) in rural areas with a focus on farmers and agricultural businesses. This transaction continues the successful cooperation between EFSE and ProCredit Bank, which started in 2015 and has facilitated an investment of more than EUR 50 million equivalent in over 700 local currency loans to SMEs in Ukraine to date.
EFSE Board Chairman Christoph Tiskens said: “Our cooperation with ProCredit Bank has proven to be an efficient joint effort in supporting small and medium Ukrainian businesses and their sustainable growth in a responsible way. With this innovative transaction, we are proud to reinforce EFSE’s commitment to foster local currency lending in Ukraine and specifically to agricultural businesses as part of the EFSE’s mission to support economic development and prosperity in the regions it serves.”
“Committed to support the development of small and medium-sized enterprises across the country, in 2016 alone, ProCredit Bank invested approximately EUR 100 million in loans to SMEs, increasing its loan portfolio by 50%. The bank will follow a similar dynamics in 2017, reflective of its high dedication to support SMEs as the most dynamic and mobile sector of the economy and help them increase competitiveness on both domestic and international markets. In the long run, such support will have a positive effect on the sustainable growth of Ukrainian economy as a whole,” said Viktor Ponomarenko, Chairman of the Executive Board of ProCredit Bank.
A representative from TCX highlighted: “TCX strives to be at the forefront of financial market development efforts wherever needed. This is successfully achieved especially by enabling our shareholders to link the funding they provide to various developing and frontier economies to the local currency of the respective countries. We are thrilled to leverage on the successful cooperation we’ve had with EFSE in the past and pioneer such local currency funding in Ukraine. We are also very proud to be able to add hryvnia to the long list of currencies that are actively supported by TCX.”
