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8.1.2 Loans
The state will guarantee up to $1bn in loans to small and medium-sized businesses at below market interest rates, President Zelenskiy told the nation Friday in his May 1 television address. The interest rates will be 3-5% -- half of Ukraine’s prime rate of 8%.
Retail loans have been growing steadily in the last two years after real incomes almost doubled over the same period and consumers were starting to leverage their income.
That should have turned into a credit-fuelled retail boom, if Russia’s experience in the noughties is anything to go by, but that particular virtuous circle never had a chance to start turning.
Corporate loans have underperformed and still do not play a big role in company funding plans as the cost of credit remains high and the loan maturities are short.
It is still early to see much evidence in the impact of the coronacrisis in bank statistics, although there was a sharp uptick in corporate bank lending in May.
47 UKRAINE Country Report June 2020 www.intellinews.com
