EBRD and EU provide further support to MSMEs in Ukraine

The European Bank for Reconstruction and Development (EBRD) and the European Union announced on 4 June that they were expanding their support for micro, small and medium-sized enterprises (MSMEs) and larger companies in Ukraine, helping them to maintain their access to finance during the ongoing war. 

Following the successful implementation of the first phase of the Financial Inclusion Recovery Programme amid strong market demand, the EU provided an additional €200 million of guarantees, €105 million of grants and €10 million of technical assistance through its Ukraine Investment Framework.

This new package is expected to unlock €2 billion of new lending through the EBRD’s partner financial institutions (PFIs) in Ukraine, reaching at least 3,000 MSMEs and supporting around 180,000 jobs.

This will scale up financing for Ukrainian MSMEs and larger companies through local financial institutions, boosting the resilience of Ukraine’s private sector in wartime. Building on the full deployment of the initial programme envelope, the initiative will mobilise significant volumes of MSME finance with EU-backed risk‑sharing support.

At least 50 per cent of all investment incentives grants will be directed to priority MSMEs, including businesses that have incurred war-related asset destruction or damage, companies in war-affected territories, veteran-led businesses, enterprises supporting the reintegration of internally displaced persons and persons with disabilities, micro businesses, start-ups, small farmers, and women- and youth-led businesses.

The programme will also support the revitalisation of Ukraine’s insurance market, with a particular focus on developing war risk insurance solutions. A pilot project will include insurance subsidies for MSMEs.

Part of this expanded support will comprise the Enterprise Security Enhancement (ESE) mechanism, which is being piloted with PFIs in Ukraine. ESE enables banks to provide partial debt relief to borrowers whose assets have been damaged by the war, addressing a critical gap in wartime finance and preserving incentives for long-term investment. The ESE mechanism is expected to be supported under the €200 million first-loss risk cover guarantees provided by the EU under this call, allowing for broader deployment across PFIs. 

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Press release