National Development Institution established in Ukraine: A new tool to support business and economic growth

The Parliament of Ukraine has passed draft law No. 11238 “On the National Development Institution” (NDI), marking a new stage in the financial support system for small and medium-sized enterprises (SMEs). The draft law was developed with the involvement of the Ministry of Finance of Ukraine, the Business Development Fund (BDF), the German development bank KfW, and Deloitte consultants, and was coordinated with the World Bank and the EU. The law was supported by 280 members of Parliament.

“The Business Development Fund, which in particular implements the state program “Affordable Loans 5-7-9%”, has proven effective in promoting economic resilience and growth. It has now become the platform for launching the National Development Institution and further integrating Ukraine into the European financial ecosystem. The law adopted today by the Verkhovna Rada also paves the way for direct cooperation between the NDI and the EU, enabling the attraction of financing from European programs for Ukrainian entrepreneurs,” emphasized Deputy Minister of Finance of Ukraine for European Integration Yuriy Draganchuk.

The NDI’s operational model aligns with the practices of the German development bank KfW, combining institutional autonomy with Government partnership.

The NDI will be a financial institution with special status, operating as a “second-tier institution” without the goal of making a profit. Its main mission is to provide SMEs with access to concessional lending through partner banks. The institution will have autonomous governance, adapted regulation by the National Bank of Ukraine, and the ability to administer state business support programs.

“Passing the NDI law is not just a paper reform. It has already opened the door to attracting tens of millions of euros and dollars for Ukrainian entrepreneurs,” said Chairman of the Board of the Business Development Fund Andrii Hapon.

He also noted that the creation of the NDI is a strategic step combining the efforts of the Government, Parliament, and international partners to build a modern financial support system for entrepreneurship.

During URC 2025, a grant agreement was already signed with the development bank KfW for EUR 40.5 million, and an additional USD 100 million from the World Bank is expected to support targeted business groups.

The new development institution is intended to become a central element of the financial infrastructure for recovery, combining state policy, international partnerships, and real opportunities for Ukrainian businesses.