On October 17, 2018 KfW and Bank Lviv signed an EUR 3.1m subordinated loan agreement. Funds are provided under the Agri-Finance Program which aims at strengthening the capital base of Ukraine’s financial institutions and at promoting micro, small and medium-sized enterprises (MSMEs) in agriculture.
Lutz Horn-Haacke, KfW Office Director in Ukraine and Moldova, said: “We took the decision to support Bank Lviv, one of the leading banks in Western Ukraine focused on MSME and agricultural activities. Acting on behalf of the German Government we are targeting financial institutions supporting mostly MSMEs, and Bank Lviv is a good example for a modern bank committed to this objective. The loan was provided on behalf of the German government. It will substantially strengthen the capital base of the bank and allow it to expand its lending activities. We believe that the KfW investment in Bank Lviv will also support the efforts of the bank’s new strategic investor – responsAbility, from Switzerland.”
By making this second investment after providing a subordinated debt to OTP Leasing in June this year, KfW is completing the Agri-Finance Program financed by the German Government.
Ashot Abrahamyan, the Chairperson of the management board of Bank Lviv said: “Signing this partnership with KfW marks an important milestone for our Bank. We aim to become the leading MSME and agricultural lender in Western Ukraine. With the completion of the capital increase from ResponsAbility in September, and with the KfW subordinated loan, we are now capable of substantially strengthening our lending activities to agricultural producers and MSMEs in the region. Our analysis shows that the MSME segment, especially the micro enterprises, face great difficulties accessing bank finance, and this slows down their development. We will change this situation, and provide competitive finance to a broad segment of the currently unbanked or underbanked entrepreneurs, strengthening production and employment in our region”.