The Verkhovna Rada of Ukraine has approved, in its second reading, bill No. 11238, which provides for the establishment of a National Development Institution — a specialized state bank. The main mission of this institution will be to finance projects aimed at rebuilding the country after the war.
This is reported by Business • Media
The New Bank Will Introduce a “Banking” Financing Model
As stated in the bill, the new institution will be analogous to the German Kreditanstalt für Wiederaufbau (KfW) and will operate on the principle of a so-called “bank of banks.” This means that it will not work directly with thousands of entrepreneurs but will provide financial resources and guarantees to commercial banks. The latter, in turn, will issue loans to businesses under special programs.
Support for Small and Medium Enterprises and Insurance for Military Risks
Among the key tasks of the National Development Institution is to address financing issues for relocated businesses, enterprises in frontline regions, as well as attracting private investments for economic recovery. Special emphasis is placed on supporting small and medium enterprises, which, despite challenging conditions, have significant potential for development and recovery.
The law also provides for the launch of a military risk insurance program in frontline regions, which is expected to serve as an additional incentive for economic activity in these areas. It is known that the new institution may be established based on the Entrepreneurship Development Fund.
“The status of a ‘bank of banks’ means that the institution will not work directly with thousands of entrepreneurs. Instead, it will provide financial resources and guarantees to commercial banks, which, in turn, will finance businesses under specific programs.”