FUIB and AKA Ausfuhrkredit-Geselschaft m.b.H. (AKA Bank, Frankfurt am Main, Germany) have entered into a trade finance facilitation agreement providing for short-term (up to 1 year), middle-term (1-2 years) and long-term (3-5 years) export credit agency(ECA)-covered financing for import contracts between FUIB’s customers  and German or Austrian suppliers of equipment, goods and services.

ECA-covered financing is popular among the FUIB’s customers as it allows:

• raising financing for investment projects at more attractive rates than lending ones (at present, in Ukraine the USD or EUR financing cost is 8-9% p.a.)
• raising borrowed money for a period of up to 5 years
• suspension of the loan issue until the equipment has been shipped; also, a principal repayment grace period of 6-12 months from such loan issue date is possible
• almost eliminates the risk of supply of goods of poor quality or inconsistent with contract terms
• when the contract is 100% financed, avoiding violation of foreign exchange controls requiring that supply be made within 180 days from the date of payment to the seller, as such money is paid directly by the foreign bank and does not cross Ukraine’s border

“Trade finance involving AKA Bank will enable domestic producers to modernise their production facilities and give them access to technologically advanced equipment. This is likely to facilitate product range broadening and reduction in production costs and penetration into new markets, thus contributing to positive economic developments in Ukraine,” said Aleksey Volchkov, Chairman of the Management Board in charge of FUIB’s corporate business.