Providing the Means for Private Entrepreneurship
Strolling past the large number of shops and restaurants in downtown Kyiv, one can’t help but be amazed at how business has boomed in the last couple years.
Ten years ago, when the country began recovering from decades of economic stagnation, its first entrepreneurial steps toward a market economy were difficult and sometimes painful. Despite winning ideas, great minds, hard-working hands, and dedication to success, the lack of capital and access to cheap and reliable financial resources prevented would-be entrepreneurs from starting a business.
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| A Lviv Branch of ProCredit Bank |
To help Ukraine develop jobs and create prosperity, USAID began to support investment in small and medium sized enterprises through the Western NIS Enterprise Fund (WNISEF), a leading private equity fund established by the US Government.
In 2001, WNISEF established the MicroCredit Bank (now ProCredit Bank) in 2001 to satisfy substantial demand for capital which local banks had failed to provide. The bank became Ukraine’s first financial institution to fully focus on micro- and small-lending to businesses.
With WNISEF assistance, ProCredit Bank secured OPIC funds to expand operations throughout Ukraine. While expansion of its loan portfolio was important to satisfy client demand, the bank also worked to make sure clients received quality services in a timely and convenient manner. Over the past six years, ProCredit Bank has established itself as a reliable partner for Ukrainian entrepreneurs, providing high-quality services to a growing customer base. The bank’s popularity has increased tremendously, as has the number of loans disbursed. Today, over 40 percent of ProCredit Bank clients apply for repeat loans—a testament to client trust and loyalty.
In 2006, the bank marked its fifth anniversary, having established 45 branches in 22 cities throughout Ukraine, and having extended 87,000 loans worth over $522 million. These numbers represent thousands of people who gained the opportunity to start their own businesses, fulfilling dreams and changing their communities for the better.
“We offered Ukrainian entrepreneurs access to lending services, the demand for which is substantially greater than supply. We are happy that behind each loan there is an interesting business idea or strategy, which is of benefit to specific entrepreneurs and for society in general,” commented Natalie A. Jaresko, WNISEF President and CEO.
In the coming years ProCredit Bank will continue expanding geographically as well as increasing its client base. This is good news for small businesses in many regions throughout Ukraine where the small business sector is still underserved in quality financial services. Hopefully, regional cities in Ukraine will also soon witness a boom in business development similar to Kyiv’s success.
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