Obtaining bank credit is a nightmare in Ukraine. Personal loans are still difficult to obtain and even when granted the interest rates are sky high. If I had wrote this yesterday (1st April) I do not think people would have taken it seriously when I say that mortgage rates are still around 18% plus in Ukraine and also require a deposit on property purchases of around 30%. Not easy.
But what of corporate lending? Even more difficult. Although Ukraine banks have regained access to external bank funds, it is very difficult for SME's or any company large or small to obtain finance.
In the UK, bank finance lending rates are the lowest they have been for many a year. UK companies also complain about the difficulty of obtaining bank finance.
In Ukraine it is possible to obtain bank lending from 'outside banks', ie foreign banks. Therefore allowing Ukraine companies to benefit from low interest rates. However if a company seeks to obtain a loan from a 'non-Ukraine' bank, they must first obtain a special certificate from National Bank of Ukraine. As you can imagine the paperwork involved is crazy, time consuming and usually involves a bribe to be paid to a member of staff inside the bank just to make it happen. Yes......The National Bank of Ukraine is also corrupt. If anyone doubts this, I can supply evidence.
However, there are some larger companies that are trying to break out of the mould by raising growth finance from other means like Eurobond placements, via IPO and selling equity stakes to outsiders if they can find them.
One recent example is Mriya the agricultural group who have recently obtain external funds and have also attracted the interest of the World Banks IFC and also the EBRD.
The groups finance director Andriy Buryak deserves credit for this success, but I a sure he had significant help from one of the big four.