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The European Bank for Reconstruction and Development (EBRD) has provided a loan to OTP Leasing, a Ukrainian lessor, to fund small and medium-sized enterprises (SMEs).

OTP Leasing is based in Ukraine and owned by OTP Bank of Hungary. The loan of 514,000,000 Ukrainian hryvnia (€17.1m) will help OTP Leasing expand its operations to SMEs and use local currency to prevent exposure to foreign exchange risks.

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The lessor will use the EBRD loan to expand its development strategy which seeks to diversify its customer base and target smaller agricultural businesses with land exceeding 5,000 hectares.

Sevki Acuner, EBRD director for Ukraine, said the country’s leasing market had shrunk in recent years, representing less than 1% of GDP. In the neighbouring countries of the Czech Republic, Hungary, and Poland, leasing represented 14% of GDP.

He said: “Therefore the loan agreement with OTP Leasing is very important, not only financially but also in terms of market confidence and development.

“The project promotes local currency lending in Ukraine, which should strengthen, in particular, the market position and competitiveness of domestic small and medium-sized companies.”

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The EBRD is the largest international financial investor in Ukraine, and has funded €12.2bn through 377 projects since it began operating in the country in 1993.

Tamas Hak-Kovacs, chairman of the board of OTP Bank, said: “We have repeatedly emphasised that OTP Bank is focused on the needs of SMEs.

“We have developed a whole range of products and services: from special overdraft and tariff packages to an integrated loan project called OTP Agro-Factory.”