Hire Two More People, Your Rate Drops to 5%: Ukraine’s “5-7-9” SME Loan Program

Ukraine’s SME loan program, known as “5-7-9%,” is a mechanism in which the state shoulders part of the interest on money banks lend, lowering the rate companies actually pay. Its basis is Cabinet of Ministers Resolution No. 28 of January 24, 2020, “On the Provision of State Financial Support,” and the procedure it sets out. This resolution has been amended more than 50 times by August 2026.

The program was originally run by the Entrepreneurship Development Fund. Cabinet of Ministers Resolution No. 203 of February 16, 2026, replaced this name in the provisions with the “National Development Institution.” What follows is based on the provisions as they stood on September 24, 2026.

The Bank’s Rate, and the Rate the Company Pays

Companies apply for financing at a “participating bank” taking part in the program. A participating bank is one that meets the criteria set out in an annex to the procedure and has signed a cooperation agreement with the National Development Institution. It is the bank that judges whether a company meets the requirements, and that assesses and extends the loan.

The provisions set the rate in two steps. One is the “base rate” the bank sets, whose ceiling is a number of percentage points above the UIRD (3-month) individual deposit rate index. For example, for a loan for equipment or similar investment by a micro-enterprise operating for at least a year, the ceiling is “UIRD + 4 points or less,” and for a medium-sized enterprise it is “UIRD + 2 points or less”; the base rate for entities other than individual entrepreneurs cannot exceed 23% a year. The other is the “compensated rate” the company pays; the National Development Institution pays the difference between it and the base rate to the bank every month, from an escrow account held at the bank.

How the 5%, 7% and 9% Are Set

The program’s name comes from the compensated rate for investment-purpose loans. As of September 2026, the provisions read as follows.

The employment condition is checked throughout the life of the loan. The bank confirms each company’s average headcount every quarter; if a micro- or small enterprise’s headcount falls, the compensated rate rises by one point per person lost, up to a ceiling of 7%. For a medium-sized enterprise, the rate moves 0.5 points up or down for each person the headcount rises or falls by.

However, the same paragraph 16 provides that, during martial law and for 180 days after it ends, the condition to increase or maintain employment may not be applied.

Special Provisions Added After the Full-Scale Invasion

When Russia’s full-scale invasion of Ukraine began on February 24, 2022, the Cabinet of Ministers amended this resolution at short intervals. Resolution No. 274 of March 12 added loans for agricultural producers, and Resolution No. 312 of March 18 added, as purposes for support, businesses meeting the needs of the military and of affected residents, and companies relocating from combat zones to safer areas. Under the provisions as they stood on July 1, 2022, the latter category carried a compensated rate of 0% during martial law and for one month after it ended, rising to 5% thereafter.

The procedure was then rewritten in full by Resolution No. 229 of March 14, 2023. The provisions as of September 2026 no longer contain a uniform 0% rate during martial law as such. In its place are several forms of preferential treatment tied to war damage.

• An investment-purpose loan for a company that both operates and has its production facilities in a “high military risk area”: 1% for the first five years, 5% thereafter. Working capital: 7%
• A loan to rebuild or repair property damaged by Russian attack: 0.1% for the first two years, then 5%, 7% or 9% depending on company size and employment, as above. The amount that can be borrowed is capped at the damage figure recorded in the documentation of the damage
• A loan to purchase or install gas-turbine, gas-engine or biogas power generation equipment, or diesel, gasoline or gas generators: 0%

A “high military risk area” refers to, among other things, an area on the list, maintained by the ministry responsible for development, of areas where fighting has taken (or is taking) place, or occupied areas. The city of Kyiv and Kyiv Oblast are excluded. The ceiling limiting total state support to the equivalent of 200,000 euros per company over three years does not apply during martial law.

How Much Can Be Borrowed, and Until When Can You Apply

There are purpose-specific ceilings on the total loan amount one company (together with related companies) can receive support for. For an individual entrepreneur it is 3 million hryvnias; for working capital outside priority sectors, 5 million hryvnias; for non-priority investment, 60 million hryvnias; and for rebuilding war-damaged property or for companies in high military risk areas, 150 million hryvnias, among others. The maximum term for an investment-purpose loan is 10 years.

The period during which applications may be made is set at eight years from the date Resolution No. 28 took effect.

Conditions Added in 2026

Several conditions were tightened in 2026. For medium-sized enterprises taking out loans on or after September 1, 2026, a new requirement is that the ratio of operating earnings to the annual scheduled interest payment (a debt-service coverage indicator) be under 5. Medium-sized enterprises with a strong capacity to pay interest are excluded from the program. From the same date, the World Bank’s environmental and social standards were also extended to loans for non-agricultural companies (excluding, during martial law, loans for rebuilding, power-generation equipment, and companies in high military risk areas, among others).

Results such as the number and total value of loans made are not covered in this article. When reading the program’s conditions, always check which point in time the provisions being read reflect. There have been more than 50 amendments since 2020, and the substance behind the same name, “5-7-9,” has changed considerably.