Cabinet approves zero interest loans to small- and micro-businesses

The Cabinet of Ministers approved on Apr. 15 credit
vacations to small- and microbusinesses that offer one-year loans of zero
percent, with the main condition being preserving at least 80% of jobs. The
largest loan under this program will be UAH 3 mln. It can be used to acquire
commercial real estate, intellectual property rights, working capital
financing, and COVID-19 prevention. It can also be used to refinance existing
debt, as long as at least 60% of the wage fund is preserved, 80% of workers
remain employed, annual revenue doesn’t exceed EUR 10 mln, and no
non-performing loans exist.

Official unemployment in Ukraine has swelled to
13.7%-15.4% since the start of the severe quarantine on Mar. 13, the highest
level in the last 15 years, said in an Apr. 16 statement Hennadiy Chyzhykov,
the president of the Trade and Industry Chamber of Ukraine. At the moment,
2.5-2.8 mln Ukrainians are unemployed, an increase of 1-1.3 mln, he said. About
4 mln people worked in spheres that halted their activity, of which 1 mln lost
their jobs, he said. In the majority of these cases, workers couldn’t get to
work after losing transportation, he said. The government’s tax vacation for
business in March and April saved them UAH 9.3 bln, he said.

The number of coronavirus infections rose by 501
cases, or 12.0%, from the prior day to a total of 4,662, according to the
Center for Public Health of the Health Ministry. That is the largest single-day
increase since the pandemic emerged in Ukraine. An estimated 125 people have
died in Ukraine, an increase of nine cases, from the COVID-19 disease caused by
the coronavirus infection. The number of recoveries rose by 60 patients to 246
in total.

Zenon Zawada: It’s
positive for the state to be offering zero-interest loans, but the report
didn’t mention how much in funds has been earmarked for this program. Without
knowing this amount, whatever effectiveness it might have is unclear. It’s also
unclear whether businesses throughout the country, without connections to the
government, will be able to tap these funds, and whether the procedure will be
simple or complicated. What is certain is that official unemployment will
remain at the current level, or more likely increase.

Even with the latest spike in cases, the daily
increase of 12.0% remains below the levels of last week, which is positive.