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This will provide Ukrainian businesses with interest subsidies to give them access to financing that would otherwise not be possible due to the current high interest rate environment in Ukraine.
„The German government continues to stand by the Ukrainian side and helps with further grant funds. We are pleased to extend our cooperation with Ukraine on economic support of businesses during the war. Last year KfW provided 150 Mio. EUR for 5-7-9 program and now we are happy to expand our support by further 50 million EUR. This is a significant part of our overall German Ukrainian Development Cooperation of more than 600 Mio. EUR for 2023“, said Dr. Ulrike Hopp-Nischanka, Head of Task Force Ukraine at the Federal Ministry for Economic Cooperation and Development.
„The stable operation of enterprises is an important component of Ukraine's economic security in times of war. The grant under the KfW project, initiated by the German Government, is a significant contribution to supporting the work of the Business Development Fund and improving existing financial assistance programmes for businesses. The funds raised will help ensure continuous access to financing for SMEs at a lower cost, which is crucial for maintaining production capacity during the war. The BDF remains a key institution for supporting lending to the Ukrainian economy,“ said Minister of Finance of Ukraine Sergii Marchenko.
„Ukrainian companies are suffering greatly as a result of the war: destroyed production facilities, high inflation and a sharp drop in sales are jeopardizing the existence of many companies. Supporting the private sector therefore remains an important task - especially in times of war. By providing interest rate subsidies to businesses during the war time, we ensure the existence of companies and secure jobs which generates income for households and tax revenue for the state,“ stated Lorenz Gessner, Head of Representative Office of KfW in Ukraine and Molcova.
„Today, 5-7-9 program is the key driver of lending to Ukraine's economy in wartime conditions, and therefore the Business Development Fund together with the Ministry of Finance of Ukraine are making significant efforts to ensure the continuity of its funding. Thanks to the constant support of Ukraine from the Government of Germany and KfW, we have a firm guarantee for small and medium-sized businesses, as well as for the banking sector of Ukraine, that 5-7-9 program, despite the complexity of the situation in the country, will continue to be implemented,“ noted Andrii Hapon, Executive Director of BDF.
KfW was founded in 1948 as a corporation under public law with its headquarter in Frankfurt am Main. KfW is Germany’s leading promotional bank for the domestic economy as well as for developing and transition countries. KfW's capital is held 80% by the Federal Republic of Germany and 20% by the German federal states (Länder). With a balance sheet total of EUR 554,6 billion (31.12.2022) KfW is one of Europe's largest banks. KfW, mainly on behalf of the German Government and also with funding form EU, supports projects mainly in the areas of energy efficiency, financial sector (first of all promotion of SME lending), vocational education training, social and municipal infrastructure and crisis response (support of internally displaced persons etc.). Visit KfW’s website: www.kfw.de
The Business Development Fund (BDF) originally called the German-Ukrainian Fund, was founded in 1999. It was established by KfW, the Government of Ukraine acting through the Ministry of Finance of Ukraine, and the National Bank of Ukraine. BDF is a state-owned non-profit institution created with the mandate of supporting the Ukrainian micro-, small- and medium-sized enterprises (MSME) by acting as the second-level development finance institution, providing financial resources to MSMEs through selected partner financial institution. Since the beginning of BDF’s operational activity, KfW provided several loan and grant facilities to BDF to support MSME and specific products/priorities. Today BDF conducts the following activities: on-lending too partner financial institutions, providing grants to MSMEs, operating the state-financed program 5-7-9% in subsidizing loan interest-rates and providing portfolio credit guarantees. Visit BDF’s website: www.bdf.gov.ua