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A lifeline for Ukrainian MSMEs

A lifeline for Ukrainian MSMEs

Ukraine Bank Lviv

Sustaining a resilient and productive agriculture sector is essential for Ukraine's resilience and food security during wartime. And it is vital for the country’s long-term recovery and reconstruction. But the war has cost the sector over $80 billion, due to destroyed infrastructure, reduced production and lost trade*. This has caused food prices to soar and undermined food security, not just in Ukraine but internationally.

In this environment, it is essential that Ukrainian MSMEs can access reliable, local-currency loans. But many are struggling to secure financing as Russia's war against the country creates a highly challenging operating environment.

Our Ukraine Sub-Fund's investment with Bank Lviv, the Fund's trusted partner, contributes to solving this problem. It includes a €20 million loan denominated in Ukrainian hryvnia (UAH), backed by financing-linked grants for MSMEs in agriculture, among other sectors. The grants will facilitate access to finance for local businesses, helping them secure business continuity amid uncertainty and unprecedented risks. 

 



*Ukraine 4th Rapid Damage and Needs Assessment (RDNA4), 2025 

Impact spotlight

In Ukraine’s Lviv region, Bohdan Denkovych has been managing his farm, Pchany Denkovych, since 2010. With 1,100 hectares of land and 1,000 cattle, the farm produces grain and dairy and is an important contributor to local food production. But, like many rural businesses, it grappled with severe challenges at the onset of the war, including limited access to raw materials, such as fertilizers, and restricted demand and sales.

 

Support from our USF — through our partnership with Bank Lviv — enabled Bohdan to invest in vital agricultural equipment. He has already acquired a modern seeder and plans to invest in a new cultivator. He also used the money to diversify the farm’s sales in the local market. These investments increased productivity and sales.

 

By empowering local agricultural entrepreneurs, we are contributing to the stabilization of the rural economy and rebuilding the country’s food security.  
  
 

Bank Lviv Farm

Ukrainian farmers constantly go through trials. Our strength lies in the fact that we always find ways to overcome difficulties.

Bohdan Denkovych, Owner of Pchany Denkovych Farm

Our investment

Our €20 million long-term, local-currency-denominated investment is increasing Bank Lviv’s capacity to provide critical financing and support to more MSMEs. It is prioritizing businesses in the vital agriculture industry, and those heavily affected by the war and undertaking essential reconstruction.  

 

In addition, the €2 million grant component for end-borrower MSMEs is designed to address current market distortions and de-risk investments that these MSMEs make to rebuild, safeguard and grow their businesses.  

 

The bank is well-established in the west of the country where, with EFSE USF support, it can effectively support newly relocated MSMEs from the more volatile eastern regions. It’s location in a region less affected by the war also means it can focus on the engines of economic activity and contribute to Ukraine's inclusive recovery. 

 

To learn more about our financing, financing-linked grants and Advisory & Capacity Building services in Ukraine, visit our dedicated Ukraine Sub-Fund page. 

bank lviv truck

Impact of our investment

Bank Lviv is effectively channeling EFSE USF financing and grant support to local MSMEs. Just a few months after the launch of our grant program, the bank had disbursed around EUR 200,000 to 15 end-investee MSMEs, helping them secure access to approximately EUR 2 million in critically needed local-currency financing. 

 

Over half of these businesses operate in the agricultural sector, while 25% are owned or led by vulnerable social groups, primarily women. This targeted outreach underscores our role in advancing inclusive economic recovery and supporting underserved communities. 

 

This story marks yet another milestone in the Fund’s successful cooperation with Bank Lviv. Since the start of our partnership in 2020, we have facilitated approximately EUR 45 million to Bank Lviv, supporting 670 sub-loans and 4,000 local jobs. Additionally, in recent years, our Advisory and Capacity building team has strengthened the Bank’s digital resilience, products and marketing capacities. 

economy bank lviv

This support aligns with our mission in Ukraine

Working with Bank Lviv aligns with our Ukraine Sub-Fund's mission to provide much-needed capital to MSMEs in the face of ongoing hostilities. Such loans allow businesses to strengthen their operations and balance sheets, attract and retain staff and invest for growth to increase their economic resilience. 

In times of crisis, Ukrainian MSMEs are not just enduring, they are innovating and rebuilding. We at EFSE USF are here to support them, and to lay the groundwork for truly inclusive recovery.