The Cabinet of Ministers has updated the rules for providing state guarantees on a portfolio basis for micro, small and medium-sized enterprises. This was reported by UNN, citing the Ministry of Finance of Ukraine
The changes are intended to make lending more reliable for banks and businesses, as well as strengthen the protection of state budget funds.
Details
As reported by the Ministry of Finance, the ministry analyzed the operation of the state guarantee program from 2020–2025 and, based on the results, revised a number of its terms.
In particular, the requirements for loans and the criteria that a loan agreement must meet when it is first included in a portfolio secured by a state guarantee have been updated.
Ukraine will also introduce additional liability for borrowers. If a guarantee event occurred under an entrepreneur's previous loan and the state fulfilled its obligations under the guarantee, the borrower will temporarily lose the right to receive new state guarantees.
In addition, the government detailed the algorithms for banks operating under the 50/70 and 80/80 risk-sharing programs and simplified the list of required documents.
Some changes concern the return of funds to the state budget. In particular, government officials defined a mechanism for conducting settlements in cases where a bank collects a debt from a borrower or restructures it.
What the program provides
State guarantees on a portfolio basis enable micro, small and medium-sized enterprises to obtain bank loans without having to fully secure them with collateral.
Under the program, the state may guarantee up to 80% of a loan. This mechanism is intended to facilitate businesses' access to financing, while part of the credit risk remains with the banks issuing the loans.
The Ministry of Finance expects that the updated rules will improve the operation of the program, reduce risks to the state budget, and make the lending mechanism more predictable for banks and entrepreneurs.