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USAID Access to Credit Project - Kyiv, Ukraine and Chisinau, Moldova


Start date: October 1, 2004

The Access to Credit Project was designed to mobilize credit for the use of small and medium businesses, prospective homeowners, farmers and municipalities. The core components of this project were in the areas of mortgage lending, municipal bonds, and financial leasing. The central activities included the development of an appropriate legal environment; development of training programs to build a knowledgeable cadre of financial professionals and the development of appropriate financial products to meet the needs of SMEs, agriculture, and municipalities.  As a result of this project, entrepreneurs were able to borrow against the value of their homes to provide capital for their businesses, a new generation of Ukrainian and Moldovan citizens were able to own their own homes, farmers were able to finance their agricultural production and municipalities were able to upgrade their infrastructure and services. In addition, banks and non-bank financial institutions had a greater capacity to make business and home loans.

The Mortgage Lending Component
The objective of the Mortgage Component was to establish a viable, effective and efficient mortgage lending sector in Ukraine . This was achieved by removing the constraints to mortgage lending by providing technical, advisory and training assistance to the National Banks of Ukraine and Moldova, to commercial banks engaged in or willing to start mortgage lending market operations, and to associations such as the Mortgage Association, the Association of Ukrainian Banks, the Association of Real Estate Brokers, the Associations of Appraisals, and others involved in the mortgage industry.

Municipal Bonds Component
The underlying objective of municipal bond market development was to increase the volume of local capital investment in support of essential municipal infrastructure and services. Our specific objective was that before the end of the contract, with technical assistance from the contractor, a minimum of 5 municipalities and/or municipal service companies would have had pilot bond issue plans approved by city councils and central government and had issued bonds. Selection of the municipalities for the pilot bond issue was subject to written approval by the project Cognizant Technical Officer. A related objective was to build the capacity of municipalities and municipal service companies, as well as the financial sector market participants (broker/dealers, regulators, underwriters, trustee, securities exchange, etc.) to issue bonds on their own, without donor assistance.

Financial Leasing Component
The objective of this component was to create a supportive environment for modern financial leasing. This was accomplished by promoting the creation of leasing companies through training and consulting; provision of training for potential lessees, farmers, regulators, and other interested parties, such as vendors, banks; consulting potential foreign investors in the sector; and conducting public awareness efforts.

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