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•10 years in Ukraine |
••• UKRAINE MICRO LENDING PROGRAMME (UMLP) - 10 YEARS OF ACTIVITY IN UKRAINE WITH MORE THAN 0.5 MILLION LOCAL MSEs FINANCED |
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Kyiv, May 2008 ••• About the UMLP In December 1997 the European Bank for Reconstruction and Development (EBRD), working jointly with the European Union's TACIS Programme and the United States Agency for International Development (USAID), launched the EBRD Micro Lending Programme in Ukraine. Earlier, in September 1996, the German government had initiated the establishment of a special credit fund, the German-Ukrainian Fund (GUF), aimed at improving the financing situation for MSEs in Ukraine. As these two programmes complemented and co-operated with one another and significantly expanded their scope and outreach they were combined in 1998 into the Ukraine Micro Lending Programme (UMLP). Today the Ukraine Micro Lending Programme (UMLP) is the most successful donor-funded micro lending project in Ukraine and an example of successful co-operation between donor institutions, confirming their commitment to support the development of Ukraine's private sector as an integral step on the path to economic prosperity in Ukraine. ••• Portfolio From the UMLP's inception in 1998 to the end of April 2008, about 575,000 loans totalling more than USD 4.4 billion were disbursed to Ukrainian micro and small entrepreneurs. The monthly output of the UMLP partner banks comes to 14,000 loans with a total volume of more than USD 160 million. The UMLP retains its strong micro business orientation. The bulk of loans in the current portfolio, approximately 60%, are express micro loans, followed by micro loans with a share of around 30%, while small and agricultural loans account for 5% each. The businesses financed, typically operate in the fields of trade (76%), production (6%), services (15%), and agricultural production (3%). The average loan amount outstanding of approximately USD 7,800 is a clear indication that the partner banks are consistently serving the target group. ••• Partner Banks Over the past ten years, nine partner banks have been providing finance to MSEs in the framework of the UMLP: Raiffeisen Bank Aval (formerly Bank Aval; a partner bank since 1997), PrivatBank (since 1997), Forum Bank (since 2000), ProCredit Bank (since 2001), Nadra Bank (since 2002), Kreditprombank (since 2004), Kredobank (since 2006), Rodovidbank (since 2007), and Megabank (since 2007). Currently three banks, namely Kredobank, Megabank and Rodovidbank, continue to receive full support from the UMLP consultants. As of the end of April 2008, the UMLP partner banks covered all 24 oblasts in the country with a total of nearly 800 MSE lending units. More than 3,500 experienced loan officers all over Ukraine are currently serving the UMLP's target group. ••• Products MSE clients have access varied types of loans through the UMLP's partner banks. Depending on the size of the business and the amount needed, private small businesses and entrepreneurs are able to receive express loans of up to USD 10,000 within 24 hours, with no collateral required. The express loan was introduced by the UMLP's consultants in 2004 and was the first business loan with no collateral requirement to be offered in the Ukrainian banking market. Partner banks issue micro loans in amounts ranging from USD 10,000 to USD 30,000 with a minimum of collateral. Loans from USD 30,000 to USD 250,000 are considered small loans and have a period to maturity of five years. Additionally, the UMLP's partner banks are serving agricultural clients with a unique product known as the Agro+ loan. ••• Technical Assistance The programme's target groups include not only Ukrainian micro and small enterprises, but also Ukrainian commercial banks interested in receiving systematic technical assistance to prepare them to carry out a large scale micro and small business lending and provide appropriate training to their staff. Since its launch in 1998, the UMLP has been implemented and managed by the German consulting company Internationale Projekt Consult (IPC) GmbH. Currently, 15 UMLP consultants are providing the partner banks with technical assistance in setting up MSE units, drafting lending procedures and guidelines, and implementing an appropriate cash-flow-based credit technology. As a result, a competitive and high-quality product in the field of MSE lending is created. As part of the technical assistance package, partner bank staff receives intensive training in credit analysis and portfolio management. Over recent years the consultants have conducted more than 200 seminars and trained more than 3,500 loan officers and bank managers. ••• Outlook In 2008 and 2009 the EBRD and the GUF plan to add another four to five new partner banks to the programme. Additionally, the programme will focus on micro lending in rural areas of Ukraine. ••• Note The Ukraine Micro Lending Programme (UMLP) is a joint effort of the European Bank for Reconstruction and Development (EBRD) and the German-Ukrainian Fund (GUF). The UMLP aims to foster the development of micro and small enterprises by facilitating their access to bank loans on a permanent basis. |
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