Parliament Approved Draft Law on Government Support for Micro, Small and Medium Businesses

Today, September 3, the Ukrainian Parliament (Verkhovna Rada) has amended* the State Budget for the year 2020 with regards to the provision of state guarantees on a portfolio basis, which were developed by the Ministry of Finance in cooperation with the Members of Parliament. 

The proposed instrument is designed to provide government support to micro, small and medium businesses, which usually have a high credit risk, due to, among other reasons, a lack of collateral to their credit obligations, deemed sufficient by banks. 

“The government is implementing all the possible measures to support the business during the quarantine restrictions and ensure quick economic recovery and development after the crisis. By virtue of the government-proposed mechanism, which was today approved by the Parliament, 5 billion hryvnias in the form of state guarantees on a portfolio basis can be directed at the support of micro, small and medium businesses”, - said Vasyl Shkrurakov, Deputy Minister of Finance.

The maximum volume of state guarantees on a portfolio basis that could be provided in 2020 is UAH 5 billion. 

Similar mechanisms of government support provision are used by many other countries to stimulate the economy (Germany, Spain, United Kingdom, France, Italy, Austria, Norway, Denmark, Sweden, Poland and others), which is especially relevant considering the negative impact of the coronavirus pandemic. 

It is important to mention that the adopted draft law also envisions an opportunity to establish financial credit mechanisms to provide Ukrainian citizens with affordable housing.

*draft Law of Ukraine “On amendments to the Law of Ukraine “On the State Budget of Ukraine for the year 2020” with regards to the provision of state guarantees on a portfolio basis and implementation of financial and credit mechanisms to provide citizens of Ukraine with housing”