This is the first systemic initiative in Ukraine to provide portfolio guarantees for loans to micro, small, and medium-sized agricultural producers issued by non-banking financial institutions.
The first example in Ukraine of systemic cooperation in guaranteeing loans in the agricultural sector issued by non-banking financial institutions.
The new cooperation format is designed to expand Ukrainian agricultural producers’ access to financing and make credit resources more accessible to small farms.
Under the program, the company’s clients will be able to obtain loans guaranteed by the Fund, which will cover up to 50% of the credit debt. Guarantees will be provided for loans to replenish working capital and finance the investment needs of agricultural producers.
“Expanding the Fund’s cooperation with non-banking financial institutions is an important step toward creating a more flexible and accessible lending system for the agricultural sector. Signing the first agreement with a non-banking financial institution opens new opportunities for farmers who need fast and convenient financial solutions. It is especially important that during wartime we are creating additional support instruments for agricultural producers and increasing their economic resilience,” emphasized Deputy Minister of Economy, Environment and Agriculture of Ukraine Taras Vysotskyi.
According to the Chairman of the Board of the Partial Credit Guarantee Fund in Agriculture Oleh Prykhodko, establishing and developing partnerships with financial companies and credit unions is an important initiative for developing the institutional capacity of non-banking financial institutions, and consequently broader opportunities for farmers seeking financing.
As a reminder, the Ministry of Economy, Environment and Agriculture of Ukraine launched a pilot project to select non-banking financial institutions (credit unions and financial companies) to finance agricultural producers with a land bank of up to 500 hectares by providing agricultural producers with loans partially covered by portfolio guarantees from the Partial Credit Guarantee Fund in Agriculture. (The Fund will guarantee up to 50% of the debt under such a loan). The total guarantee limit is 80 million UAH.
