BOFIT Seminar - Solomiya Shpak (George Mason University) - Government Support and Firm Performance: Evidence from “5-7-9” Program in Ukraine

Co-authors: Klaus Deininger (World Bank),  Daniel A. Ali (World Bank), and Oleg Nivievskyi (Kyiv School of Economics)

This study focuses on the evaluation of the state credit program "Affordable Loans 5-7-9%" introduced in Ukraine in early 2020 to improve access to credit for micro and small enterprises with the ultimate goal to create jobs, and boost investment. Since February 2022, the program has become the main driver of lending to the corporate sector in Ukraine. To evaluate this program, we use unusually rich and granular micro-level data on the beneficiaries of the program between early 2020 and the first half of 2023, credit registry data, information from financial statements as well as micro-data on agricultural enterprises in Ukraine. All of these datasets allow us to document the evolution of the program since its inception in early 2020 and trace how the profile of borrowers, amount of lending and lending conditions changed between 2020 and first half of 2023. Using matched sample of firms, we also estimate impact of the program on the battery of performance measures of agricultural enterprises such as employment, revenue, productivity, and survival.

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