Ukraine—EU/EBRD SME Support to Ukrainian Banks, 2nd Tranche UkrSibbank

UkrSibbank received a €50 million credit line from the European Bank for Reconstruction and Development (EBRD) in 2008, but had difficulty disbursing funds in the wake of the global financial crisis and its impact on the Ukrainian economy. The free-falling Ukrainian currency, the hryvnia, and dwindling trust in a government paralyzed by infighting led to a frenzied rush in autumn 2008 to withdraw deposits. Amid the resulting liquidity crisis, banks stopped performing their contractual obligations. Since the beginning of 2009, nine banks were placed in receivership, and many of those with foreign ownership received aid from their parent institutions. UkrSibbank, majority-owned by BNP Paribas and with a dense branch network covering all regions of the country, sought out technical assistance from DAI. DAI implemented a small and medium-sized enterprise (SME) lending scheme at UkrSibbank, with the focus on building the bank’s capacity through training in credit analysis and portfolio management.

Sample Activities

• Build capacity in portfolio monitoring and risk management.
• Streamline SME lending processes.
• Improve credit scoring and application processing.
• Build capacity in compliance, reporting, marketing, and product development.

Select Results

• Supported disbursement of 643 loans totaling €44 million.
• Trained 120 participants throughout the branch network and with training of trainers on customer retention in eight locations.
• Assisted loan officers with loan applications.
• Conducted review of applications.
• Set lending targets by branch.
• Analyzed loan application process.
• Recommended improvements and implemented suggested changes to current lending processes and procedures.
• Monitored portfolio quality and ensured full compliance of all existing and new facility loans with EBRD requirements.