What has the Government done to improve the "Affordable Loans 5-7-9" program?

In implementation of the recommendations of the Accounting Chamber, provided following the results of the efficiency audit on the topic of «State financial support for business under martial law», the Government has eliminated certain gaps in the implementation of the state program «Affordable loans 5-7-9» (hereinafter - the Program),and the Antimonopoly Committee of Ukraine has taken steps to resume reporting on state aid.

Let us recall that UAH 34.7 billion was used to implement the Program from 2021 to May 2024, including UAH 30.9 billion under martial law. At the same time, according to the results of the audit, some shortcomings in the implementation of the Program were identified. Thus, despite the high demand from business for financial assistance from the state and the positive economic effect of this support, as of 01.01. 2024, the deficit under the Program amounted to 7.1 billion hryvnias. This is  led to the fact that most authorized banks, except state-owned ones, suspended the issuance of new loans to business entities.

The auditors also found that the performance indicators determined by the Ministry of Finance and the Ministry of Economy in the passports of budget programs for business support did not characterize the degree of achievement of state policy goals, the purpose of the budget program and the fulfillment of tasks in this area,  and the reports of the Ministry of Finance on the implementation of the passport of this budget program for 2021, 2022 and 2023 reflected unreliable indicators.  

To eliminate the identified shortcomings, the Accounting Chamber provided 11 recommendations, to implement which the responsible bodies took a number of measures:

– The Government,  at the proposal of the Ministry of Economy, made amendments to the Procedure for Providing Financial State Support, in particular, it obliged authorized banks to quarterly check the intended use of the loans provided and analyze the reporting of recipient enterprises;

– The Ministry of Economy approved the passport of the budget program for financing the Entrepreneurship Development Fund for 2025, which specifies the areas of use of funds: full or partial compensation by the Fund of interest on loans to business entities and fees under financial leasing agreements and factoring (UAH 18 billion is provided for these purposes);

– The Ministry of Finance updated the reporting forms of banks under the Program;

– The Fund developed the technical specifications for the Information and Analytical System for Accounting, Systematization and Unification of Reporting on the Processes of Providing State Support and Monitoring its Targeted Use.

Also, to overcome the Program's deficit, the Ministry of Finance developed a draft Government resolution that provides for the abolition of the limitation on the amount of state support for business entities (over 200 thousand euros over three years),introduced during martial law, because the Program – is state aid, the register of which is compiled and maintained by the Antimonopoly Committee of Ukraine. Since the beginning of martial law, business entities have been exempted from the obligation to report on such assistance. At the same time, in order to ensure proper conditions for competition in the markets, in accordance with the recommendations of the Accounting Chamber, the AMCU is taking measures to restore reporting and is working on improving the mechanism for submitting relevant information (draft law No. 12181 has been registered).

Thus, six recommendations have been implemented under this audit and the implementation of five more has begun. 

The Accounting Chamber continues to monitor and analyze the status of implementation of the recommendations provided to the audited entities and will inform the public about its results.

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