The government's debt to banks for compensating preferential interest rates under the state program "5-7-9" is expected to reach approximately 10 billion UAH by the end of 2024, compared to 7 billion UAH in 2023. The program requires a shift in focus towards projects that are in greatest need of funding, as stated in the December report on financial stability by the National Bank of Ukraine (NBU).
Additionally, the report mentions that the conditions of the state program "eOselya" also need to be reviewed.
"Given the improvement in market conditions, state support has already lost its decisive role in lending. Furthermore, operators of state programs often face funding shortages, making stable support impossible. Accordingly, state support programs for lending, primarily "Affordable Loans 5-7-9%" and "eOselya", require reassessment," the December report on financial stability from the National Bank of Ukraine (NBU) states.
In particular, the central bank forecasts that the level of government debt to banks for interest compensation under "5-7-9" will amount to 10 billion UAH by the end of 2024, while it stood at 5.8 billion UAH in early June and 7 billion UAH at the end of last year.
"This creates additional uncertainty for banks and borrowers participating in the program and slows down its operation. (…) The key priority remains the effective use of available funds and the reduction of debt. To achieve this, limited resources need to be concentrated on projects that require the most support, such as investment projects," the report notes.
As highlighted by NBU First Deputy Governor Kateryna Rozhkova during its presentation, the "eOselya" program also requires further changes to direct support to the segments and layers of the population that need it most. Moreover, she added that the program should not displace market relations.