OTP Bank received a $2.76 million grant from USAID Investment for Business Resilience Activity for concessional lending to micro, small, and medium-sized enterprises
OTP Bank, JSC has received its second grant from the USAID Investment for Business Resilience Activity to expand financial access for micro, small, and medium-sized enterprises (MSMEs). More than 100 companies have already been financed with this program during the first phase. This new tranche of $2.76 million will bring the total grant amount to $4 million, which will cover a portion of the interest rates for the enterprises.
The grant program envisages that OTP Bank, JSC will lend to businesses at an interest rate of 9.9% per annum in the first year of the loan agreement. The grant funds will cover the difference between the client and market interest rates. From the second year onward, customers will pay interest on the loan at the rate of UIRD3m + 5% p.a. (UIRD3m representing the Ukrainian index of three-month retail deposit rates).
Eligible MSMEs with annual revenues up to EUR 50 million and up to 250 employees that fall into one of the target groups will be able to get access to concessional financing from OTP Bank. This includes:
- relocated businesses and businesses affected by hostilities;
- companies operating in critical sectors of the economy such as agricultural production, production of construction materials and electrical devices, transportation, logistics, processing, etc.;
- businesses with women in ownership.
"The Project started cooperation with OTP Bank under the grant program in September 2023. The results of our partnership are significant. Over this period, more than 100 companies have received financing from the bank for almost UAH 550 million at a subsidized interest rate. The objectives for the second stage of the program are even more ambitious - to provide access to finance and subsidize the interest rate to more than 330 enterprises. We believe that such business support will contribute to the recovery of Ukraine's economy, which is suffering greatly from the war," said Raphael Jabba, Chief of Party, USAID Investment for Business Resilience Activity.
The maximum loan amount that a company or a group of companies can receive under this program is UAH 20 million, and the minimum loan amount is UAH 1 million.
The grant program also covers factoring agreements, under which the bank's clients can receive financing of up to 90% of a supply agreement value, in the amount of UAH 2 to 20 million.
Farmers will enjoy special terms and conditions if they use funds received under the grant program to purchase products from OTP Agro Factory partners.
"The cooperation between OTP Bank and the USAID Investment for Business Resilience Activity continues, and it means a lot to us. The bank has proven to be a reliable, effective, and long-standing partner that honors its commitments. The grant is critical for Ukraine and its economy, which is under incredible pressure during the war. Thanks to this program, businesses in critical industries will receive much-needed support, war-affected companies will be able to recover, and women-entrepreneurs will receive an additional incentive to develop their businesses," said Volodymyr Mudryi, CEO, OTP Bank.
In the first stage of the grant program, which started in 2023, OTP Bank supported more than 100 enterprises, including businesses with women in the ownership structure, agricultural companies, enterprises critical industries of Ukraine's economy or affected by the war, and a relocated business. MSMEs also received factoring under the joint grant program.
About USAID Investment for Business Resilience Activity
The USAID Investment for Business Resilience Activity (IBR) is a five-year program implemented by DAI Global LLC that supports systemic changes in Ukraine’s economy and increases the supply of finance available to Ukrainian businesses. IBR aims to transform the country’s financial sector into a well-functioning and competitive market that is aligned with European Union standards and integrated into international financial systems, while directly providing financing to enterprises for sustained economic growth in Ukraine.
For additional information about the USAID IBR, please visit its Facebook page at: https://www.facebook.com/IBRUAproject.
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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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