The financial crisis of 2008-2009 in Ukraine caused an abrupt fall in small and medium sized enterprises’ (SMEs) access to bank loans because of economic recession, financial difficulties for SMEs and accumulation of bad loans by banks. Now banks slowly increase SMEs financing, but credit conditions are much tighter. Banks increase their requirements towards SMEs financial statements and collateral, they more often refuse SMEs application for loans and investment loans to SMEs considerable declined. SME lending is a perspective business for banks, and they are ready to increase amount of loans to SMEs in 2013-2014 even under the current moderately pessimistic economic expectations. However, impediments to recovery of SMEs access to bank financing are serious: slow economic growth, still high amount of bad loans, slow progress in strengthening creditors’ rights, weak and non-transparent business of SMEs. SMEs name such impediments as high interest rates and collateral requirements. Given the prominent role of SMEs in economic development, state policy is needed to increase SMEs access to financing. However, direct state financing of SMEs are very small and is not able to affect SMEs access to financing. At the same time, state initiatives to strengthen legal and business environment to stimulate bank lending to SMEs have had little progress for the moment.
For more details about SME crediting, please, see the report «Will the banks lend to small and medium sized business in Ukraine?» (ukr).