The Ukrainian government has unveiled a significant initiative aimed at bolstering financial support for businesses affected by the ongoing conflict. Prime Minister Serhii Koretskyi announced on September 17 that the Cabinet of Ministers will subsidize interest rates on loans up to Hr. 1 billion (approximately $22.4 million) for key economic sectors, marking a strategic move to stimulate recovery.
Under this new program, the government will cover 5.5 percentage points of the base interest rate set by banks. This funding is intended for critical areas such as restoring fuel and warehouse infrastructure, modernizing processing facilities, and providing working capital for wholesale and retail operations.
Expanded War Risk Insurance
In addition to the loan subsidies, the government is enhancing its war risk insurance program for businesses. This expansion includes simplifying compensation procedures and extending coverage to include high-risk areas such as Kyiv and its surrounding region. The prime minister highlighted these updates in a recent social media post.
The range of insurable assets has been broadened to encompass fuel, transportation vehicles, agricultural machinery, and trailers. Furthermore, the maximum annual compensation for insurance premiums has increased from Hr. 3 million ($67,200) to Hr. 5 million ($112,000), now also covering leased properties.
“Russia’s daily attacks on civilian enterprises and logistics facilities have inflicted severe losses on businesses, necessitating immediate support for recovery,” Koretskyi stated. He emphasized the urgency of providing entrepreneurs with additional resources to mitigate the impacts of the conflict.
National Bank of Ukraine Governor Andriy Pyshny expressed his support for the expanded credit initiative, noting that the central bank’s experts contributed to its framework. He reassured stakeholders that the banking sector is well-equipped to meet the anticipated demand for loans.
Addressing the broader economic landscape, Pyshny acknowledged existing state arrears to commercial banks under the previous “5-7-9%” loan program, a persistent challenge. He confirmed that collaborative efforts are underway to optimize repayment schedules while maintaining financial stability.
Recent reports indicated a resurgence in the issuance of loans under the subsidized program after a period of decline. The National Bank of Ukraine estimated that the government’s outstanding debt to banks under this initiative could reach approximately Hr. 10 billion ($223 million) by year-end, up from Hr. 8 billion ($178 million) in 2025.
Pervin Dadashova, Director of the Financial Stability Department at the NBU, noted that the growth in loans is driven by the refinancing of working capital in sectors with limited immediate financing needs and the inclusion of new areas eligible for softer lending terms.
