Delo.UA has gathered advices for entrepreneurs on where to find resources that could help businesses grow
Ukrainian businesses desirous of entering foreign markets would have to invest a bundle in their development. They would need resources to study foreign markets, visit other countries, adapt their products to market demand, find partners and promote their products. This topic was discussed at the conference for entrepreneurs in Odesa “Business together: how to enter the European market”. Delo.UA has gathered advices for entrepreneurs on where to find resources that could help businesses grow.
The EU4Business initiative of supporting small and medium-sized enterprises, co-financed by the European Union and implemented by the European Bank for Reconstruction and Development, European Investment Bank, KfW, OECD, International Trade Center, World Bank and other partners, has been active Ukraine for almost 10 years. EU4Business consists of numerous projects and programs for entrepreneurs.
“The European Union provides support in four areas: financing small and medium-sized enterprises, consultative assistance to SMEs, assistance with accessing foreign markets, and support of regulatory policy reform,” Anna Bondarenko, a EU4Business communications, expert says.
One of the latest EU4Business programs is the creation in Ukraine of a network of Business Support Centers. “These Centers have already been opened in 15 cities across various regions. They receive a substantial share of financing provided by the European Union under consultative assistance programs for SMEs,” Mrs. Bondarenko clarifies. “Among other things, the Centers help Ukrainian businesses engage consultants and financing. In sum, they supply the entire information a business might need.”
Business Support Centers organize a lot of business trainings and conferences in regions. “These are mostly sectoral events,” Anna Bondarenko says. “For example, you can find out how to correctly prepare documents to win a European grant, or learn from management, marketing or HR specialists.”
By contacting one of EBRD’s regional offices or a Business Support Center, a Ukrainian company may receive a grant to engage a business consultant, Artem Vashchylenko, Executive Director of the Business Support Center in Mykolaiv says.
You can engage a consultant for the most diverse tasks, Mr. Vashchylenko says, — to develop a strategy, analyze energy efficiency of production processes, prepare your company for export operations, find partners in foreign markets, or prepare standard export contracts.
To receive a grant to engage a consultant, you should contact one of EBRD’s regional offices or a regional Business Support Center. You should state what expertise your company needs and in what area. You can select a consultant from the list of specialists accredited with the European Bank for Reconstruction and Development.
“Today, you can choose any consultant from among 300 accredited specialists,” Artem Vashchylenko clarifies. “These are both Ukrainian and European consultants. You can propose your own specialist as well, but he would have to pass accreditation with EBRD.”
Your company has to pay the consultant’s fees themselves. But thanks to support from EU4Business, a company may receive a reimbursement of 50% to 70% of the consulting project’s costs.
The maximum amount coverable by a EU grant is 10 thousand euros.
One of the latest initiatives from EU4Business is a joint program with the German-Ukrainian Fund offering cheaper loans to small and medium-sized businesses.
For that program, the German government has provided 10 million euros to finance Ukrainian businesses, and the European Union allocated another 5 million euros to compensate foreign exchange risks. “In other words, banks and end borrowers received a cheaper resource worth the total of 300 million hryvnias,” Valerii Maiboroda, Acting Director of the German-Ukrainian Fund explains.
In six months, 78 Ukrainian enterprises received UAH 240 million worth of loans under this program.
“It is very important that 40% of them are investment loans issued mostly to finance purchase of equipment for Ukrainian production facilities,” Mr. Maiboroda clarifies.
According to him, Ukrainian businesses can receive a loan at the reduced rate of 15% APR versus the average market rate of 18-20%. These loans are issued for up to six years, and disbursed by the Fund’s six partner banks: ProCredit Bank, Ukrgazbank, Savings Bank, Creditwest Bank, Megabank and Credobank.
“The 15% rate is still too high for Ukrainian businesses,” Valerii Maiboroda says. “We were able to join efforts with Kyiv City State Administration, which will reimburse the interest rate to businesses. Thanks to our joint efforts, we’ll be able to finance businesses in Kyiv at 7.5 or 10%.”
The German-Ukrainian Fund has already signed agreements on similar programs with authorities of the Kharkiv, Cherkasy and Ternopil Oblasts. “We sent the offer to another 15 regions, and are waiting for response,” Mr. Maiboroda sums up.
Therefore, the European Union provides support to numerous programs helping Ukrainian small and medium-sized enterprises develop. Entrepreneurs themselves do not always know about it, though. But the joint project of Delo.UA and the EU Delegation to Ukraine, Business Together, will help them find out.
Based on materials of the conference “Business together: how to enter the European market” (Odesa, 8 June)
The original article was published on Delo.ua