Ukrainian banks presented preferential lending terms for arms manufacturers - members of the Ukrainian Council of Defence Industry

On April 4, Kyiv hosted an industry meeting “Among Armorers: Financing the Defense Industry” initiated by the Ukrainian Council of Defence Industry. The event was attended by representatives of the government, the banking sector and defense companies, who discussed new mechanisms of preferential lending tailored to the needs and specifics of defense production.

Among the speakers were:

• Alexander Kamyshin, Chairman of the Supervisory Board of the Ukrainian Council of Defence Industry;

• Hanna Hvozdyar, Deputy Minister for Strategic Industries of Ukraine;

• Maksym Cherkis, Advisor to the Minister for Strategic Industries;

• Ihor Fedirko, Executive Director of the Ukrainian Council of Defence Industry.

Representatives of key Ukrainian banks - Ukreximbank, Oschadbank, PUMB and MTB - as well as arms manufacturers, including members of the Ukrainian Council of Defence Industry, also joined the discussion.

Lending for the defense industry: special conditions, new opportunities

The focus is on the government's preferential lending program, which allows for financing at 5% per annum. Under this program, 9 loans totaling UAH 623 million have already been issued, and another 74 applications are pending with banks for a total of UAH 8.64 billion. According to Oleksandr Kamyshin, the program aims to provide producers with the necessary resources to invest in CapEx and OpEx.

Portfolio guarantee - a solution for companies without collateral

Maksym Cherkis presented a portfolio guarantee mechanism that allows companies with criticality status that have been operating for more than 12 months to get a loan even without the classic collateral. This is especially important for young manufacturers who do not own property but are already fulfilling contracts.

Banks demonstrate openness to cooperation

Representatives of the banks voiced their proposals for defense manufacturers:

• Ukreximbank offers flexible financial restructuring instruments;

• Oschadbank considers property rights under existing government contracts as an alternative collateral;

• the possibility of setting up SPV companies to attract investment in production infrastructure was also discussed.

Clarifications for the market: what producers need to know

Mr. Fedirko emphasized the need for a broader information campaign for manufacturers: “Many newly established companies, which are less than a year old, are unaware of the special terms of preferential financing, so they apply on general terms. Our goal is to inform market participants that the government takes into account the specifics of the defense industry and offers real support tools.” During the meeting, the idea of expanding the financing program through the introduction of a leasing mechanism was also discussed - this issue is currently being considered. The Ukrainian Armaments Manufacturers Council will continue to conduct information campaigns on opportunities to attract financing for market participants, in particular, in the format of regular meetings “Among Armorers”.