DGAP-News: ProCredit Holding AG & Co.KGaA

Tallinn/Kyiv/Luxembourg, 26 October 2017

First EIB local currency loan for SMEs in Ukraine made possible with EU support

The European Investment Bank has provided its first ever local currency loan in Ukraine to improve access of small and medium-sized businesses to affordable financing.

The loan to ProCredit Bank Ukraine denominated in the Ukrainian Hryvnia, equivalent to EUR 60 million, has been made possible by the European Union and TCX, an international currency exchange fund. It is a landmark deal combining EIB financing with donor resources.

The European Union has supported the transaction by allocating EUR 5 million of grant funding which allows for an affordable interest rate on the loan. The EU contribution forms part of the European Union's wider EU4Business initiative, which brings together EU support to SME development and improving the business environment in the Eastern Partnership region.

Furthermore, the operation has been made possible by the EIB's investment in the TCX - an innovative financial institution which provides long-term local currency and interest rate derivatives in emerging market currencies to its investors and their clients.

At a dedicated signing ceremony ahead of the Eastern Partnership Business Forum in Tallinn, Estonia, EIB's Vice President Vazil Hudák said: "This is a historic transaction, one that should make EIB funds even more available to clients than before. We are thankful for support by the European Union and happy to be extending our partnership with the ProCredit Group, one of the most reputable intermediaries in the region when it comes to providing credit to SMEs."

Johannes Hahn, Commissioner for European Neighbourhood Policy and Enlargement Negotiations, said: "Improved access to affordable long-term finance in local currency is one of our main priorities under the EU4Business Initiative, particularly for SMEs in Ukraine. I am pleased that today we can join forces with the EIB in order to address these shortcomings, allowing these SMEs better conditions for access to finance."

Victor Ponomarenko, General Manager of ProCredit Bank Ukraine, said: "As a bank that aims to be the "Hausbank" for small and medium-sized enterprises in Ukraine, we know that access to affordable medium to long-term local currency funding is key to facilitating investment. This loan will support us in contributing to the further development of SMEs."

The development of local currency finance remains a challenge in Ukraine due to its high exposure to exchange rate movements. SMEs selling their goods and services domestically in local currency but borrowing in foreign currency are highly exposed to the currency risk. The EIB operation is tailored to enhance access to affordable medium- to long-term local currency funding for domestic businesses in order to ultimately strengthen their market position and competitiveness while mitigating their exposure to exchange rate volatility.

ProCredit Bank Ukraine has been a long-standing partner for the EIB and is currently one of the key players in SME financing in Ukraine with a proven track record and significant experience supported by an extensive branch network throughout the country.

Background information:

About ProCredit Bank Ukraine: ProCredit Bank Ukraine is a development-oriented commercial bank offering excellent customer service to small and medium enterprises and to private individuals who would like to save. The bank is part of the international ProCredit group, whose shareholders are large financial institutions and investment companies. Strong backing from the bank's shareholders, and its membership of in the international ProCredit group, which is supervised by the German Federal Financial Supervisory Authority (BaFin), are factors which guarantee ProCredit Bank's stability and reliability. More information: http://www.procreditbank.com.ua

About ProCredit group: ProCredit Holding AG & Co. KGaA, based in Frankfurt am Main, Germany, is the parent company of the development-oriented ProCredit group, which consists of banks for small and medium enterprises (SMEs) and whose operational focus is on South-Eastern and Eastern Europe. In addition to this regional focus, the ProCredit group is also active in South America and Germany. The company's shares are traded on the Prime Standard segment of the Frankfurt Stock Exchange. The anchor shareholders of ProCredit Holding AG & Co. KGaA include the strategic investors Zeitinger Invest and ProCredit Staff Invest (comprising the investment vehicles for ProCredit staff), the Dutch DOEN Participaties BV, KfW Development Bank and IFC (part of the World Bank Group). As the group's superordinated company according to the German Banking Act, ProCredit Holding AG & Co. KGaA is supervised on a consolidated level by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and the German Bundesbank. For additional information, please visit www.procredit-holding.com

About EIB: The EIB - the European Union's bank - is a AAA-rated, policy-driven EU financial institution raising funds in capital markets to on-lend to eligible investments supporting EU policies and priorities. The EIB passes on the financial advantage it obtains through benefits such as attractive interest rates and long maturities to projects that score highly in terms of EU objectives and are consistent with the Bank's commitment to supporting sound, sustainable investments. The EIB's extensive experience in financing projects, its in-house sector expertise and its deep knowledge of European policies facilitate the identification of projects that match both national and EU priorities. The EIB's project appraisal covers technical, economic, financial, environmental and social aspects as well as credit risks, provides for the appropriate mitigants and conditionality and helps structure projects in line with EU standards. The EIB thus acts as a flag carrier for EU policies outside the EU, contributes to the dissemination of best practices and facilitates the participation of other financiers in EU priority projects.

About TCX: The Currency Exchange Fund (TCX) is a unique financial institution that provides currency derivatives in emerging & frontier markets to its shareholders and their clients. Its shareholders include most major development finance institutions in the world and a number of specialized microfinance investors. As at 31 December 2016, the Fund had hedged more than USD 1.5 billion in long-term loans made in the currencies of 46 developing countries.

About EU4Business: EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership region (Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine) to realise their full potential and boost economic growth. For more information on EU4Business, follow the link: www.eu4business.eu

Press contacts:
ProCredit Holding: Andrea Kaufmann, Group Communications, ProCredit Holding,
Tel.: +49 69 951 437 138: Andrea.Kaufmann@procredit-group.com

EIB: Dušan Ondrejička, d.ondrejicka@eib.org , tel.: +352 4379 83334/mob.: +352 621 459 234
Shirin Wheeler s.wheeler@eib.org , tel.: +44 207 375 9670 / Mobile: +44 7827 445611
Website: www.eib.org;