Ukraineʼs state-owned giant PrivatBank and the International Finance Corporation (IFC) signed two agreements that aim to increase access to credit for small and medium-sized enterprises and support Ukrainian companies entering new markets.
One provides $100 million for risk-sharing to boost lending, while the other offers $20 million in trade finance guarantees to support cross-border business.
“The start of our partnership with IFC is a truly historic moment. These are the first agreements between our institutions,” the PrivatBank press release quoted Mikael Björknert, CEO of the bank. “I’m confident they will scale up our lending capacity and make financing more accessible.”
Russia’s ongoing full-scale invasion has left businesses and property vulnerable nationwide, hindering investment and economic recovery in the absence of financial safeguards.
PrivatBank and IFC’s first agreement creates a $100 million risk-sharing facility. PrivatBank will provide loans to businesses across sectors, including agriculture, manufacturing, and logistics, backed by IFC’s instrument guarantees in case the borrower defaults.
The facility will also target businesses founded by women, which are expected to make up 35% of the portfolio, PrivatBank reported in a press release.
The second agreement gives PrivatBank access to a $20 million trade finance guarantee from IFC. This allows the bank to finance more companies engaged in international trade, strengthen ties with global banks, and support Ukrainian businesses in entering global markets.
The trade finance guarantees protect contracts for exports and imports, allowing them to cover the losses if anything goes wrong during the supply across the border.
Under this agreement, PrivatBank becomes part of IFC’s Global Trade Finance Program (GTFP), which provides guarantees to manage payment risks and unlock additional financing for cross-border trade.
Overall, IFC’s risk-sharing program in Ukraine, including the PrivatBank project, is expected to provide around $1 billion in new loans for businesses.
In the past eight months, PrivatBank’s business loan portfolio grew by 40.1%, the release says.
“Our collaboration with PrivatBank is designed to help Ukrainian entrepreneurs – especially small businesses and women-led companies – move forward despite challenges,” the release quoted Ines Rocha, IFC Regional Director for Europe. “With innovative trade finance and risk-sharing tools, we’re opening new opportunities for businesses to create jobs and contribute to Ukraine’s recovery.”
In June 2024, PrivatBank entered the large corporate lending market, positioning itself as a new rival to Ukraine’s top banks. Already dominant in retail banking, its move intensified competition across the sector.
After one year in Ukraine’s corporate lending market, PrivatBank has expanded its large corporate loan portfolio from about Hr.2-3 billion to over Hr.10 billion ($48-72 million to $240 million).
PrivatBank is a powerhouse in Ukraine’s banking sector, accounting for 43% of total net revenues in 2024. The bank reported Hr.80 billion ($1.9 billion) in sales and Hr.440.1 billion ($955.7 million) in net profit last year.