Olha Radinovych founded a company with two other female friends 14 years ago, when each of them had only $100 in their pockets. At the time, their business idea seemed risky.
Now, she is the director of the company, a Ukrainian manufacturer of orthopaedic and medical products. The company produces 87 kinds of orthopaedic products and more than 100 different compression knitwear products.
The enterprise has been looking for ways to increase production for years, as there has long been a significant demand for the products. However, the company’s working capital was insufficient to buy the necessary equipment, and high interest rates on loans in Ukraine (more than 20%) made it impossible to attract the necessary funds.
In the summer of 2018, while driving her car, Olha heard on the radio about EU4Business loans for small and medium-sized enterprises (SMEs) through the German Ukrainian Fund (GUF).
The GUF implements the KfW programme of the EU4Business SME Finance Facility Phase II under the EU4Business initiative, with funding from the EU and Germany through the German Development Bank KfW.
“We had been dreaming about buying German equipment for the compression knitwear for a while, we even negotiated with its manufacturers,” the entrepreneur says.
Under the EU4Business programme, 50% of the nominal interest rate set by the loan agreement is compensated for SMEs in Kyiv by the city administration. Olha says that after hearing about EU4Business on the radio she only had to make one phone call and tell the programme about her project. The programme then gave Olha the opportunity to access the lowest possible interest rate in Ukraine.
“Within two months, our German partners developed special equipment for us. It cost us about €90,000. However, thanks to the fact that half the interest is paid by the Kyiv city administration, we have to pay 7.5% of the provided amount in six years," Olha says.
Olha says the investment helped her company increase its production and quality of products and create additional jobs.
“We had to add another work shift and our technologist went to Germany for training,” Olha says proudly.
Within less than a year of receiving a loan, the company had increased its production and started exporting its products to Belarus, Poland and Estonia.
Author: Uliana Bukatiuk
Story first published on the EU Neighbours East website www.euneighbours.eu