DFC and USAID sign agreement with Lviv Bank on $40 mln portfolio guarantees

The U.S. International Development Finance Corporation (DFC) together with the U.S. Agency for International Development (USAID) signed an agreement to provide portfolio guarantees to Lviv Bank in the amount of $40 million, Head of Lviv Regional Military Administration Maksym Kozytsky reported on Monday.

"Ukrainian entrepreneurs will be able to receive financing on favorable terms with minimal collateral requirements. This will allow them to invest in commercial real estate, receiving loans with partial collateral coverage," he noted on Facebook.

According to him, this will be especially useful for domestic exporters and importers, who will now find it easier to attract significant amounts of financing to develop their activities.

"The first program of such guarantees in western Ukraine has already proven its effectiveness: thanks to it, 500 loans were issued for a total of almost $19 million," he added.

Kozytsky noted that similar programs are operating in two more banks, which allowed the total portfolio of DFC loan guarantees to exceed $100 million.

Details about the deal are not available on the websites of the bank, DFC and USAID as of now.

According to the National Bank of Ukraine, as of October 1 of this year, Lviv Bank ranked 25th (UAH 12.3 billion) among 62 banks operating in the country in terms of total assets. The financial institution received UAH 196.06 million in net profit for the first nine months of this year, while for the same period last year it was UAH 150.9 million.

At the end of October this year, a similar agreement on attracting guarantees for loans to small and medium-sized businesses in Ukraine for a total of $40 million was signed with DFC by Lviv-based Kredobank. In this case, the guarantee covers 80% of the loan amount, i.e. the agreement will allow Kredobank to issue loans for businesses for $50 million.

It was specified that loans for working capital, investment loans and leasing under DFC guarantees will be available to enterprises operating throughout the controlled territory of Ukraine, with no more than 300 employees and no more than $15 million. The maximum loan amount for a client is $1.5 million in equivalent. Within the framework of the program, at least 25% of all loans under DFC guarantees should be received by enterprises in the agricultural sector.