Factoring for MSMEs can become a more attractive instrument of bank financing compared to classic lending - N. Kondratchuk
Factoring financing for micro, small and medium-sized enterprises (MSMEs) can become a more attractive instrument of bank financing compared to classic credit products. This opinion was expressed by the director of OTP Bank corporate financing department Natalia Kondratchuk during the "Affordable factoring" program presentation. The program will operate within the framework of the "Affordable loans 5-7-9%" State program to provide working capital for MSMEs.
"The appearance of such a new program can be an additional impetus for MSME companies to consider factoring as a possibly more attractive instrument of bank financing, compared to classic credit products, such as an overdraft or revolving credit line. It is especially relevant for small companies with a limited amount of their own assets due to the absence of the need to provide security, as well as the reduction of the interest burden for them," N. Kondratchuk said.
The Entrepreneurship Development Fund (DEF) has been appointed as the operator of the "Affordable Factoring" program and will implement it through partner banks.
OTP Bank, which has been offering factoring financing since 2005, was one of the first to join the implementation of the state program, providing each company with individual advice on it and the benefits of this tool.
About the "Affordable factoring" State program (the Ministry of Finance data).
Financial support of business entities under factoring contracts provides for interest rate compensation at the level of up to 13% per annum. The authorized factor will provide factoring to the business entity in the amount of up to 95% of the receivables, but the amount of financing cannot exceed UAH 150 million, including funds received under the "Affordable loans 5-7-9%" programs and "Affordable financial leasing 5-7-9%".
The program can be joined by:
- Micro, small, medium and large enterprises - residents of Ukraine, who supply goods manufactured by a Ukrainian manufacturer, on the terms of deferred payment;
- private individuals – entrepreneurs;
- legal entities, the ultimate beneficial owner (controller) of which is a private individual - a resident of Ukraine;
- agricultural producers.
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Public Joint Stock Company OTP Bank is a subsidiary of OTP Bank, which is the largest independent Central-Eastern-European banking group. JSC OTP Bank is one of the largest domestic banks, a recognized leader in the financial sector of Ukraine. The Bank provides a full range of financial services to corporate and private customers, as well as to small and medium enterprises. The bank entered the Ukrainian market in 1998, and since then it enjoys a staunch reputation of socially responsible, reliable and stable institution providing its consumers with services of European quality standard.
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