International EBRD Lending as the Source to Finance Development of Enterprises in Ukraine

Abstract

The paper states that the European Bank for Reconstruction and Development is of particular importance for the economy of Ukraine. Ukraine has been a member of the EBRD since August 1992. EBRD works on a commercial basis, providing only targeted loans for specific projects to private and public entities to the needs of the economy (60 % of loan funds aimed at private and 40 % – in the public sector). EBRD focuses more on projects designed to increase market efficiency, energy, transport and utility infrastructure, agribusiness and financing small and medium business in Ukraine. EBRD provides Ukrainian commercial banks loans long-term target for lending to projects of small and medium enterprises, and monitoring the selection of banks can participate in the program. Also, the borrower can apply directly to the Bank. But this concerns quite large enterprises. However, microcredit programs are not very active. Thus loans from the EBRD is aimed mainly at larger companies. Funding EBRD in the Ukrainian economy is generally decreasing, that can be explained by uncertainty outcomes funded projects that require more attention EBRD projects regarding credit analysis and disclosure of ultimate owners. Also, in our view, expand financing for small businesses and small farms could be more effective than focusing on large enterprises.