Megabank: Unlocking Credit Access to Catalyze Investment in Ukraine
Sector: Financial services
Challenge: In countries vulnerable to violent conflict, access to reliable financing for small and medium enterprises (SMEs) can often be limited. Inhibited by risk aversion, commercial lenders cannot extend the credit necessary for business to grow, further hampering job creation and economic stability.
Solution: In 2015, OPIC guaranteed an $8 million loan to Ukraine’s MegaBank, headquartered in Kharkiv and with a branch network throughout Ukraine. Using this OPIC financing, MegaBank will expand its SME lending portfolio, helping to finance business growth, creating opportunity and employment, and fostering economic stability. This is the second guaranty in a continuing partnership with MegaBank.
Impact: Sustained access to credit is an important economic foundation for stability in places vulnerable to violent conflict. Despite the number of bankable growth sectors in Ukraine like agriculture and energy, intrepid entrepreneurs often lack the capital to grow.
With the support of OPIC financing, MegaBank can continue to issue new loans and expand its existing portfolio, operating from bank branches spread across Ukraine, including Eastern Ukraine, where credit access has been particularly constrained. Small business lending is an important element to bottom-up economic growth, since it creates jobs, stability, promotes the creation of transport and supply infrastructure, and offers the confidence necessary for investors to realize the vast growth potential in Ukraine.
OPIC and MegaBank will allow businesses to access this necessary capital, and the lending portfolio will also have an important demonstration effect, showing the global business community that Ukraine is a market worth investing in.
This project was profiled in 2015