The Parliament Budgets UAH 2 billion for Entrepreneurship Development

The Parliament of Ukraine approved in the second reading the Draft Law on Amendments to the Law of Ukraine "On the State Budget of Ukraine for 2020" in terms of the Entrepreneurship Development Fund" (No. 2589).

Thus, UAH 2 billion will be allocated from the state budget for the program "Ensuring the Functioning of the Entrepreneurship Development Fund" for the implementation of the program of affordable lending in Ukraine. Such a move is in line with the Presidential Initiative on promoting business, lending and job creation, as well as priority 6.4 of the Government's Action Program. The budget program will be financed by the State Budget of Ukraine 2020 from the early repayment of bills of the Deposit Guarantee Fund in the amount of UAH 2 billion, which will allocated to the special fund of the state budget.

Entrepreneurship Development Fund

The Entrepreneurship Development Fund aims to support the development of micro and small businesses. Expanding and facilitating MSEs' access to investment lending will allow them to create jobs, increase production and export volumes, develop high-tech manufacturing and introduce innovations, as well as improve energy efficiency. This program will also encourage the return of migrant workers, as it will increase the availability of cheaper loans.

Support will be provided in two ways:

• The first is to reduce the cost of loans by compensating the interest rate to 5, 7 and 9 percent per annum on national currency loans. The percentage depends on the size and type of business:

• 5% per annum if the revenues are up to UAH 25 million and at least 2 jobs are created;
• 7% per annum for businesses with revenues up to UAH 25 million which do not create new jobs, but for each new employee the rate will be reduced by 0.5%;
• 9% per annum for businesses with revenues up to UAH 50 million.

• The second way is to provide partial guarantees for loans to micro and small businesses, if they do not have enough collateral

The procedure for providing support will be determined in the near future by a decision of the Cabinet of Ministers of Ukraine.

The Entrepreneurship Development Fund is the successor in the German-Ukrainian Fund. The Fund is managed by the Ministry of Finance of Ukraine after the relevant decision of the Cabinet of Ministers of Ukraine on December 11, 2019.