EBRD-EU4Business credit line provides concessional financing for business development

Vinnytsia company GPS PRO carries out satellite monitoring of transport and stationary objects. KBK Fortis from Odesa erects residential and non-residential buildings. Both companies benefited from the EBRD-EU4Business credit line to lease cars needed for business development. This helped to optimise production processes and survive the crisis caused by the effects of COVID-19. Part of the cars’ cost was reimbursed by the EU.

The pandemic and the quarantine restrictions that followed it dealt a serious blow to small and medium-sized businesses. Some of these enterprises were compelled to change format, unify losses, lay off personnel or, unfortunately, close down.

The government’s response to new challenges is insufficient, and it is slow on the uptake when it comes to performing its most important function: supporting the economy. If the economy doesn’t work, the country and people are unable to develop and move forward.

In these conditions, concrete targeted assistance to businesses provided by the European Union is very important.

Ukrainian small and medium-sized enterprises received almost 31 million euros in low-interest financing under EBRD’s loan program EU4Business.

During the first half of this year, 259 projects of small and medium-sized businesses in Ukraine received 30.56 million euros under “EBRD’s Line of Credit: EU4Business”.

These programs often become a lifesaver for Ukrainian entrepreneurs, who despite all odds have learned not to lose heart and see opportunities in calamities.

The heroes of this article work with “EBRD’s Line of Credit: EU4Business”, a joint initiative of the EU and EBRD providing assistance to Ukrainian SMEs by financing their investments.

GPS PRO (https://gpspro.online/) is a company located in Vinnytsia. One of the areas of its business is satellite monitoring of motor vehicles and stationary objects. How does it work? The system consists of two parts: software and hardware. The former is the software companies and clients work with. The latter is the equipment itself (GPS trackers, fuel level sensors and so on). A GPS tracker collects all data from the entire equipment installed on a monitored object and, according to regulation, transmits this data to a server at Wialon, where it becomes available to users.

In fact, there are many areas where satellite monitoring can be used. It could be any stationary object, for example, a fuel dispenser.

The installation of this system allows to monitor the motor fleet, improve work processes, eliminate abuse by dishonest drivers, such as unauthorized fuel discharging and selling it on the side, uncontrolled trips, forged receipts, tampering with odometer readings and other machinations.

More and more often, Ukrainian companies equip their motor fleet with a satellite monitoring system. If a vehicle does not have a GPS tracker, learning about the route traveled by the driver is impossible.

To be sure, our conversation with Ivan Semeniuk, the company’s cofounder and director, began with explanation of how this system works.


We implement satellite monitoring systems to enable companies and organizations to control the movements and operation of their vehicles in real-time mode. For this machinery is often operated all over Ukraine, while the capabilities of dispatch control services are limited.

– Can you compare you own market activity before the quarantine and during the pandemic-related restrictions?

We are seasonal workers who depend on time of the year and weather, because we work mostly with construction, road maintenance and agricultural enterprises.

Техніка клієнта перед початком монтажних робіт. На задньому плані – асфальто-бетнний завод. І часто доводиться працювати під дощем і в багнюці.

Photo: Customer’s machinery before the start of installation work. In the background is an asphalt and concrete manufacturing plant. They often have to work in rain and in mud.

We also have work in wintertime. Usually, it is cargo transportation. In addition, we install equipment in hangars. Therefore, the first wave of COVID did not affect us very much. The construction and agricultural sectors felt quite confidently: no quarantine was imposed in these sectors, because everyone is working in the open air.

So, we weren’t too dependent on restrictions. Although I understand that it happened only because our work was safe from the viewpoint of social distancing and avoidance of large crowds.

Інтерфейс програмного забезпечення. В даному випадку – графік детектування заправок і зливів пального

Photo: Software interface. In this case, a fueling and fuel discharging detection diagram

– I know that you used a line of credit to purchase a van you needed for your work. I often hear that European organizations are quite bureaucratic, take a lot of time to make a decision and then are slow with carrying it out. How did it work in your case?

For us, it was important to buy a vehicle fast. We decided to go for a Fiat Doblò Cargo panel van.

We needed to optimize the technological process of our operation, which is possible only when both the vehicle and equipment are procured simultaneously. A vehicle alone, without equipment, would not solve our problem.

Спецтехніка клієнта, яка підготовлена до монтажу обладнання

Photo: Customer’s machinery ready for installation of equipment

But the equipment we installed on that vehicle has significantly accelerated and optimized our work. We began with monitoring the market of financing provided by Ukrainian banks. In doing so, we placed great hopes on the loan program promised by the government, which disburses financing at 5-7-9 percent interest via state-owned PrivatBank. All this time we stayed on top of it, communicating with the bank.

Unfortunately, we were told that even in the optimistic scenario we will have to wait 2-3 months. And there was no guarantee that everything will work out and that we’ll be able to receive a loan.

That was when we learned about the EBRD program, under which we were able to lease a motor vehicle for our company in collaboration with OTP Bank.

Зчитування даних з CAN-шини автомобіля

Photo: Reading data off motor vehicle’s CAN bus

All organizational matters – from gathering information to picking up a vehicle – took approximately three weeks of our time. A very short period indeed for such a bureaucratic procedure. To say that we were pleasantly impressed would be saying nothing.

It was quick, businesslike, without unnecessary paperwork and exhausting bureaucratic formalities. It is worth noting that we had fears that leasing could turn out to be more expensive for us. Fortunately, it didn’t happen.

Moreover, we quickly received a refund of 10 percent of the vehicle’s price, which EBRD paid to us. Using this money and the company’s own funds, we additionally bought the necessary equipment for the van. So now, we can accelerate production processes and utilize our capacity in a more optimal way.

– How do you plan your actions, and what business decisions will you make with regard to the pandemic, which for the time being shows no signs of receding?

Speaking about business with regard to lockdown and certain restrictions, I am rather cautiously optimistic. No panic and no despair.

I always say: just don’t touch businesses. Don’t want to help – fine, no need to. Just don’t get into our way. The company where I am a co-owner went through many phases in its development.

Встановлення GPS трекера, зчитування даних з CAN-шини автомобіля

Photo: Installing a GPS tracker, reading data off motor vehicle’s CAN bus

I know and understand that one should always work well and responsibly. Our activity is unrelated to the restaurant or retail business, for example. The areas where we provide our services do not involve personal service.

We are geared toward road construction and growing of agricultural crops. And I hope that COVID-related restrictions will be more prudent and less ruinous for businesses and people.

KBK Fortis, a company operating in Odesa and the Odesa Oblast in residential and nonresidential construction business


Natalia Riapych, chief accountant, speaking about what her company had to face at the very beginning of quarantine:

The biggest problem that has occurred with the outbreak of coronavirus-related crisis was delays with service payments. Debt settlement transactions were really slowed down. Some owed money to us, we owed to others, and the running in circles continued.

As you know, these things really complicate work processes. The general lockdown caused a huge problem with working capital, and we felt it right away. Surely, we are trying to stay afloat in such a difficult situation and not to accumulate debts.

In times of crisis, it becomes obvious how well-established relationships with contractors and one’s own employees really work. At the core of these relationships is trust. When you are trusted, you may be able to escape from difficult situations. But one should not abuse trust.

That’s why we work in new, very difficult conditions with great responsibility and thoroughness.

– How did cooperation with EBRD help you?

Thanks to this cooperation, we were able to lease several trucks. Our own means of production allow to save resources and better plan our time.

For you do not depend on partners and other contractors. You don’t have to wait for a leased truck to arrive while having an urgent work to do. It simplifies and optimizes processes. It is worth saying that cooperation with EBRD via OTP Bank was fast and successful.

Handling the paperwork and picking up each vehicle took up to three weeks. They consulted us and helped with paperwork at all stages of this process.

Our cooperation was comfortable. There was, however, an episode when a new manager at the bank somewhat slowed down the process because of the lack of experience. Yes, it was making us nervous, but we knew that not everyone becomes a professional right away. Surely, online options and such a service as Nova Poshta significantly simplified our efforts.

Own transport is always better than leased one.

– I saw forecasts that the rate and volume of construction work at many companies are declining.

That’s right, and that could be expected. Let me tell you about us. We build residential and nonresidential properties. Presently, for example, we are commissioning two family-type outpatient facilities at Kamianka and Bolharka villages in the Rozdilna Raion of the Odesa Oblast.

Again, because of quarantine restrictions we’re running slightly behind the commissioning schedule, but hope to be done by 20 October. Moreover, the construction of these infrastructure facilities is paid for with public funds.

There are quite substantial delays with that, although for objective reasons. We do not lay off anyone, and our team is not that large: up to 40 employees. We staffed it to make sure that we have interchangeability during production processes.

Surely, we hire contractors to do specific work, such as installation of air conditioning, ventilation and fire extinguishing systems. This work must be done by licensed organizations, and in this regard we work in the partnership with contractors.

What’s next? Fortunately, we have work. It will definitely be enough for us till the end of this year, and the beginning of the next year will probably be busy for us as well. We have well-established relationships and a good reputation. Today, we receive smaller orders, but we never turn down anything. We hope to go through this crisis with minimal losses.


Overall, every fifth small business in Ukraine may close down because of the quarantine, the European Business Association (EBA) forecasted after surveying small and micro businesses back in April 2020. 78% of them complained about the loss of up to 75% of revenues, and over 30% of them considered cutting wages of personnel or downsizing the staff.

Recently, the Union of Ukrainian Entrepreneurs also published a large survey in which small and medium-sized businesses participated. These are the most vulnerable categories of business the most adversely affected by quarantine restrictions. According to this survey, 29% of respondent entrepreneurs suspended their operation for the duration of quarantine and 6% completely closed down the business. Kateryna Glazkova, Executive Director of the Union of Ukrainian Entrepreneurs, says that half of all businesses need affordable loans to survive. And it’s quite obvious that nobody will be able to avoid layoffs and losses.

Therefore, the EU’s assistance with receiving financing helps small and medium-sized businesses to stay afloat and not to fall into financial abyss.

For information: EU4Business is a EU initiative helping small and medium-sized enterprises in six countries of the Eastern Partnership region (including Ukraine) to utilize their potential in a more efficient way and stimulate economic growth.

EU4Business works with a number of Ukrainian banks. For the list of partner banks, visit: http://smemap.eu4business.eu/finance/

By Zoya Kazanzhy

Source: Ekonomichna pravda