Agrarians of the Kyiv region are in the lead in terms of the number of "available loans" received this year

Since the beginning of the current year, 9.27 thousand Ukrainian agricultural enterprises have received UAH 63.9 billion in bank loans for the development of their own business. According to the press service of the Ministry of Agrarian Policy of Ukraine, 26.48 billion UAH from the total amount under the state program "Affordable loans 5-7-9%" were received by 5,608 households. And the largest volume of loans under various programs in 2024 was received by agrarians of the Kyiv region - UAH 16.2 billion for 886 enterprises.

Also in the list of agricultural leaders of Dnipropetrovsk region - 4.31 billion UAH for 691 enterprises, Cherkasy region - 4.01 billion UAH for 382 enterprises, Kirovohrad region - 3.95 billion UAH for 1,103 thousand enterprises and Lviv region (3.89 billion UAH for 575 enterprises) oblasts. At the same time, under the program "Affordable loans 5-7-9%", enterprises of the Kyiv region also received the most - UAH 3.27 billion (allocated to 546 farms). In addition, among the agricultural leaders of Kirovohrad region - UAH 2.5 billion (737 farms), Vinnytsia region - UAH 2.32 billion (556 farms), Odesa region - UAH 2.19 billion (525 farms) and Kharkiv region - UAH 2.05 billion ( 332 farms). 

We will remind that last year the Cabinet of Ministers of Ukraine significantly improved the mechanisms of state business support under the program "Affordable loans 5-7-9%". In particular, the Government strengthened support for recycling and energy efficiency projects throughout Ukraine, business support in the de-occupied territories, and introduced state support mechanisms under factoring contracts. As reported by the Ministry of Economy of Ukraine, the changes approved by the government, in particular, provided for business in the territories of the high military risk zone (de-occupied territories) interest compensation under the program to the level of 1% for the first two years, 5% from the following year for investment purposes and 3% for working capital financing; increasing the term of lending to 10 years for investment purposes and increasing the limit of the program to UAH 150 million (for enterprises that have suffered destruction and operate in the de-occupied territories). At the same time, for all other cases, a rate of 13% per annum is set for the financing of working capital. The resolution "On the provision of financial state support" was also supplemented by the Government's decision with the Procedure for providing financial state support to business entities under factoring contracts (financing subject to the assignment of the right to a monetary claim for supplied goods, performed works, rendered services, etc.). The Order also regulates limits for banks on interest rates, one-time commissions and commissions for additional services, increased (penalty) compensation for violation of the conditions of the factoring contract by the business entity, etc., establishes criteria for entrepreneurs who will apply for state aid under factoring contracts and requirements for factoring contracts.

But recently, at the end of the first half of the current year, the National Bank of Ukraine recognized that the scale of the state program "Affordable Loans 5-7-9%" exceeded the capabilities of the state, so its conditions must be radically revised. As noted in another report by the state regulator, the program played an important role after the start of the full-scale invasion, but at present its scale is too large for the national budget. In the first year of full-scale war, the Affordable Loans 5-7-9% program played an important role in supporting business, and during 2022-2023 the government amended the program 16 times. Mostly, credit limits were increased and the list of lending areas was expanded. Until now, the portfolio of loans subsidized by the program reached UAH 129 billion at the beginning of this June. At the same time, the cost of loans to customers remained low even during the period when market rates were rising. Thus, the program became more expensive for the state, because the state's debt for the payment of compensation for loans as of the beginning of June amounted to UAH 5.8 billion. At the same time, some banks formed more than 50% of their net hryvnia corporate portfolio at the expense of the program, while on average this share is about a third of the system. Moreover, at a certain stage, the program began to subsidize not only clients, but also participating banks. It restrained price competition and reduction of lending rates by banks. In order to further improve the program, the National Bank of Ukraine proposes to gradually focus mainly on investment projects, and to provide loans for replenishment of working capital only to certain categories of clients. For example, the funds can be further provided to a business that has the potential to recover, but whose financial performance due to war losses does not allow it to service the loan on market terms. It is also possible to consider the possibility of limiting the total portfolio of loans under the program, taking into account the budget allocated to it.

We will remind you that earlier it was reported about the intentions of the Government of Ukraine in the current year to pay maximum attention to agricultural financing programs. For this reason, the list of state support programs has been expanded once again. As First Deputy Minister of Agrarian Policy and Food of Ukraine Taras Vysotskyi emphasized on this occasion, there will be 5 main programs this year. This is, first of all, "5-7-9 Available Credits". Farmers under this program can receive a loan of up to UAH 90 million, and processing enterprises - up to UAH 150 million. In addition, entrepreneurs cultivating up to 500 hectares can receive a loan guarantee through the Fund for Partial Guarantee of Loans in Agriculture. Thanks to this, the manufacturer can reduce the loan collateral in half. In addition, grants have been prepared for the development of gardens and greenhouses. Their size is up to UAH 7 million or UAH 10 million, respectively. These funds will be paid within a month after the approval of each project. Another program will be a project to compensate up to 50% of the cost of restoration and construction of reclamation systems.