OREANDA-NEWS. The European Bank for Reconstruction and Development is providing a $20 million loan to Kharkov-based Megabank. The loan, which is the first significant transaction for the EBRD in Kharkov, will be used to provide long term financing to domestic micro, small and medium businesses, the press-service of the bank announced.

This project will allow regional companies to borrow up to $250,000 for micro businesses and up to $750,000 for small and medium businesses from Megabank. This should provide a significant boost for this important sector of the regional economy. Technical assistance for Megabank, aimed at the development of the bank's micro, small and medium business lending activity as well the improvement of corporate lending methodology was provided by the Netherlands and the European Union. Kurt Geiger, EBRD Director for Financial Institutions said the Bank is seeking to support regional banks that can compete on the basis of their strong local brands, quality of service and speed of decision-making. Megabank has an ambitious objective to increase its SME lending operations by nearly 40 per cent in near future and EBRD is happy to provide resources for this, he added.

According to Megabank's Chairman of Board Elena Zhukova, this loan will allow the bank to actively develop lending to SMEs, which are vital for middle class establishment. "Megabank has very ambitious long-term objectives and this financing will become a means which will help achieving them," she said.

Additionally, the EBRD is extending a USD 3 million Trade Facilitation Programme credit line to the bank.  Megabank will thus become the eleventh Ukrainian Bank to join the Programme, which provides credit facilities in the form of EBRD guarantees issued in favour of international commercial banks, covering the risk of issuing banks in the region.

The European Bank for Reconstruction and Development is the biggest financial investor in Ukraine. As of the end of August 2007, it had committed over USD 3 billion through more than 140 projects.