The FINANCIAL -- Small and medium-sized enterprises (SMEs) in Ukraine account for a large majority of private sector employment and help drive much-needed stabilisation and economic growth.
The EBRD, with support from the European Union under its EU4Business Initiative, works to strengthen this important segment of the economy with tailored finance and business advice.
Moreover, with its Woman in Business programme, the Bank focuses on advancing women’s entrepreneurship to fully unleash the development potential of the entire SME sector.
This more inclusive and sustainable development approach is supported by the views of Ukrainians recently revealed by the EBRD’s Life in Transition survey on the perception of life quality in economic transition countries, according to EBRD.
In Ukraine, 86 and 81 per cent of female and male respondents, respectively, believe that women are as competent as men as business executives.
One incarnation of this model is Yulia Alekseeva, the founder and CEO of Kiev-based tour operator Zabugor. The company’s name, in Ukrainian slang, approximately translates to ‘over the hill’, meaning ‘abroad’. During Soviet times, people used it to mean ‘beyond the Iron Curtain’.
When she established her company in 2007, the hill Yulia had to climb was a different one. The challenges were about establishing her market position as a luxury travel operator, developing a network of trusted agents and building her business’ reputation among a very selective client base with the Maldives, Mauritius and Seychelles featuring at the top of their preferred destinations’ list.
Over the years Ms Alekseeva has created a strong business relationship with service providers including dozens of airlines, insurance companies and hotels around the world. Zabugor offers individual luxury travel, business trips and ticket sales. However, the company’s website had started to look outdated and could not offer online services to clients and business partners.
Ms Alekseeva knew exactly what needed to improve but lacked the specific expertise. So, when she heard about the Women in Business programme, she contacted the EBRD to put her in touch with a web design and marketing expert to develop an action plan to build a completely new website. The project was funded half by Zabugor, half by the EU.
The EU has provided funding worth over €55 million since 2002 for the EBRD’s Advice for Small Businesses and Women in Business programmes through its EU4Business initiative which covers all the EU Eastern Partnership countries: Ukraine, Moldova, Belarus and the South Caucasus.
The initiative fosters the development of the private sector by helping SMEs acquire new skills, becoming more competitive, accessing more finance and increasing their export to new markets, including the EU.
It also supports the government with policy reform in order to improve the business climate.
By working side-by-side with the consultant, Zabugor launched its new website in less than four months. The number of orders placed online has increased by 25 per cent, freeing time to dedicate to other areas of the business.
The number of employees has reached now 25, 40 per cent more, including a new web content manager and a large majority of women. And importantly, her clients have become more loyal and repeat business increased.
“This was a very positive experience which made me realise the benefits of business advice. I will definitely use consultants for my business ambitions again in the future: I have ideas, they have the know-how and they can pass it on,” said Ms Alekseeva.
In order to reach out to more businesses like Zabugor, thanks to the EU4Business initiative, the EBRD is establishing a network of 15 business support centres across Ukraine.
In addition, last December the EBRD opened its third regional office - after Kiev and Lviv - in the eastern city of Kharkiv, in the heart of the industrial region of the country, thanks to the EU financial support.
The new office boosts the EBRD’s work with small businesses in Ukraine by offering better access to expert advice for local small enterprises.
The Head of Delegation of the EU to Ukraine, Ambassador Hugues Mingarelli, said: "Most SMEs in Ukraine have limited access to finance, while women-owned or led companies sometimes face additional obstacles that limit their growth potential. It results in lower productivity and lower value-added. In order to avoid this trap, the EU is supporting and funding Women in Business programme. With this tailor-made instrument we are able to offer women-led companies access to finance together with best know-how and advice."
The EBRD is the largest institutional investor in Ukraine. The development of the private sector is a priority for the Bank. In addition to finance, the Bank has provided expert advice to more than 650 local SMEs since 2010, thanks to funding from the EU and other donors, increasing competitiveness, stimulating growth, and supporting the creation of over 2,500 jobs countrywide.