State-Backed Loans for Farmers: Fintech Firms Secure First 80 Million Hryvnia Guarantee Limit

First Guarantee Agreement Signed with a Non-Bank Fintech Company

According to ХВИЛЯ: The Fund for Partial Credit Guarantee in Agriculture has signed its first Guarantee Agreement with the non-bank fintech company Activitis. This marks a historic first for Ukraine, where state guarantees will now cover loans issued to farmers not by banks, but by financial technology firms. The total guarantee limit for this pilot project is set at 80 million hryvnias (UAH).

Focus on Small Agricultural Producers

The project is specifically designed for small-scale agricultural producers who own or lease up to 500 hectares of land. The Fund will guarantee up to 50% of a farmer's credit debt, significantly reducing the risk for the lending institution. Funds obtained through this program can be used for:

• working capital needs, such as purchasing seeds, fertilizers, or fuel;
• investment purposes, for example, to buy machinery or equipment.

The initiative has received backing from the Ministry of Economy, Environment, and Agriculture, highlighting the government's commitment to supporting the vital agricultural sector. This pilot could be a significant step in developing Ukraine's farming industry by providing producers with more financing options. The move is particularly notable as Ukraine's agricultural sector is a cornerstone of its economy, traditionally dominated by bank lending. By involving non-bank financial institutions, the project aims to foster greater competition in the lending market, which may ultimately lead to better financing terms for small farmers and positively influence the overall growth of the country's agriculture.