PrivatBank and the International Finance Corporation (IFC), a member of the World Bank Group, have started a strategic cooperation. For the first time two institutions signed agreements that will expand micro, small and medium sized business lending and support Ukrainian companies in entering new markets.
These include a $100 million Risk-Sharing Agreement and an Issuing Bank Agreement providing a $20 million trade finance guarantee from IFC.
A $100 million Risk-Sharing Facility will expand MSME lending across various sectors, including agribusiness, manufacturing, and logistics, with a focus on women-owned businesses.The facility is complemented by a performance-based incentive to increaseее lending to women-owned MSMEs, which are expected to make up about 35 percent of the portfolio.
Under the RSF, IFC will assume up to 50 percent of the credit risk, with a maximum exposure of $50 million.
Who will be able to benefit from this opportunity?
Companies with fewer than 250 employees and an annual revenue of less than EUR 50 million or total assets of less than EUR 43 million.
What is the amount of an individual loan?
From USD 10,000 to USD 100,000.
What is the limit per borrower (group)?
USD 1 million.
IFC’s participation in this facility and the performance-based incentive are supported by France and the Netherlands through IFC’s Economic Resilience Action (ERA) Program for Ukraine.
Meanwhile, an Issuing Bank Agreement enables PrivatBank to join IFC’s Global Trade Finance Program (GTFP), which helps local banks expand financing for cross-border trade by offering payment risk guarantees and managing payment risks. As part of this partnership, IFC will provide a $20 million trade finance guarantee facility to PrivatBank, enabling the bank to finance more imports and exports, increase partnerships with international banks, and support Ukrainian businesses in reaching new global markets.
“The beginning of cooperation between IFC and PrivatBank is truly historic. These are the first agreements between our institutions. I am confident they will expand lending opportunities, and make financing more accessible. As the largest bank in the country, serving almost 60% of Ukrainian entrepreneurs’ accounts, we are convinced that our partnership with IFC will help Ukrainian SMEs to scale its operations, enter new markets and, as a result, will contribute to the country’s economic resilience,” said Mikael Bjorknert, Chairman of the Management Board of PrivatBank.
“Our work with PrivatBank is about making sure Ukraine’s entrepreneurs—especially smaller firms and women-led businesses—can keep moving forward despite the challenges,” said Ines Rocha, IFC’s Division Director for Europe. “With innovative trade finance and risk-sharing tools, we’re helping open doors to new opportunities so businesses can create jobs and contribute to Ukraine’s recovery. This first engagement with PrivatBank is expected to launch a strong partnership built on our shared commitment to private sector growth.” said IFC Ines Rocha, Regional Director for Europe
In total, IFC’s RSF program in Ukraine, including the project with PrivatBank, is expected to enable approximately $1 billion in new lending to private-sector businesses.
As the largest bank in the country, serving 60% of all business accounts, PrivatBank remain committed to supporting SMEs. The business loan portfolio has grown by 40.1% over the past 8 months.
