London-based European Bank for Reconstruction and Development (EBRD) announced deepening its partnership with Ukraine’s central bank and state-run savings bank Oschadbank.
By doing so, a news release says it is releasing €200 million ($217 million) to the state-run bank that covers 50 percent of its credit risk to lend money to private businesses.
A separate EBRD note says that a memorandum was signed with the National Bank of Ukraine, the nation’s bank regulator, to help Russo-Ukrainian war veterans better access financial services through 20 financial institutions that have so far signed up to the initiative.
“A key element in planning the country’s continued economic resilience is boosting its human capital by attracting more people to return and re-enter the country’s much-reduced workforce,” the EBRD statement said.
The bank’s goal, together with Oschadbank, is to support “the reintegration and re-socialization of war veterans into civilian life and protecting their economic interests and opportunities, contributing to the inclusiveness of the financial sector in Ukraine.”
Before Russia’s full-fledged invasion in February 2022, financial institutions in Ukraine provided services to more than 30 million customers.
The lending program aims to promote entrepreneurship among war veterans amid “a shrinking national workforce but also with the need to reintegrate increasing numbers of demobilized workers back into jobs,” the international bank said.
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EBRD’s separate lending guarantee from its unfunded portfolio risk-sharing facility is designed to bring total lending guarantees for Ukraine to €900 million ($977 million) since February 2022.
The state-owned bank’s assets as of Jan. 1 stood at $8.8 billion, Ukraine’s Finance Ministry says.
Part of the guarantee offered to Oschadbank is from the US’s Crisis Response Special Fund that provides “first-loss” risk to “mitigate the risk associated” with the new lending exposure.
Small and medium-sized businesses that have suffered due to Russia’s war are now eligible to “receive additional investment incentives.”
Oschadbank is the nation’s second-largest bank by assets and provides services to more than 6.2 million retail customers, more than 4,000 corporate and 224,000 small- and medium-sized business clients, the news release said.
EBRD added that it has deployed more than $4 billion in Ukraine since the start of the war and has lent to such industries as, energy, infrastructure, food security and trade as a priority.
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