18 September 2012  Promotion of Enterprise. Bukovyna Fund

Small and Medium Enterprise Funds to Help Create Estimated 26 Thousand New Jobs

Speaking at the presentation of the first six projects qualified for funding from Bukovyna Investment Fund in Chernivtsi today, Mr. Dmitry Firtash, President of the Federation of Employers of Ukraine argued that setting up small and medium enterprise funds in all regions of Ukraine has a potential of creating about 26 thousand jobs within 4-5 years.
 
“Should SME Funds be set up in all regions of Ukraine, this may create some 26 thousand new jobs. We estimate that such funds will be able to commit 120 – 150 million UAH to starting business,” projected Mr. Firtash.
 
The FEU President further noted that 26 thousand jobs can be created by 7 or 8 large enterprises but building such enterprises will cost dozens of billion hryvnias. "The cost of one job at a small company will be around 4.5 thousand UAH while a job at a huge facility will cost 200 to 300 thousand hryvnias,” pointed out Mr. Firtash.
 
Mr. Firtash noted that in Europe, SME play a pivotal role in creating employment opportunities. “Due to the enterprise promotion infrastructure development in Europe, 80 % of jobs in the past decade were created by small and medium companies. Promotion of enterprise with particular emphasis on small and medium businesses is a top priority for Ukraine if we genuinely aspire for curtailing unemployment,” stressed Mr. Firtash.
 
The FEU President further noted that enterprise promotion funds must be set up in each region of Ukraine: “Local business people and local authorities have a better understanding of their respective communities’ capacity and their markets’ specifics,” explained Mr. Firtash adding that the idea of establishing funds of this kind are being discussed in ten regions at the moment: “Ten days ago I was attending the Kharkiv Investment Forum where I proposed to Kharkiv business people to set up an investment fund. In just several hours, about 5 million hryvnias were raised for the fund. If we keep up with this pace, funds like this will emerge in all regions in just 18 – 24 months. We will show to the entire country that even limited financing is capable of powering SME development,” said Mr. Firtash.
 
The FEU President also pointed out that small and medium enterprise strengthening stimulates the development of Ukraine’s domestic market and economy at large. “Today, the economy of Ukraine depends on the operation of 300 companies accounting for 85 % of the country’s GDP while as little as 15 % is generated by small and medium companies. In Europe, the share of small businesses in the national GDP reaches 40 – 50 %. Raising small and medium enterprise’s share in the economy of Ukraine up to at least 40 % is a must,” insists Mr. Firtash.
 

NOTE

The investment Fund Bukovyna was set up upon an initiative of the President of the Federation of Employers of Ukraine Mr. Dmitry Firtash subsequently joined by another four Chernivtsi business people: Ms. Stella Stankevych, Chairwoman of the Board of Directors, ‘Trembita’ company; Mr. Vyacheslav Dobrovolsky, President, ‘TechnoPlus’ company; Mr. Victor Sidliar, CEO, ‘Chernivtsi mashzavod’; and Mr. Ivan Semeniuk, CEO ‘Rodnichok’ company. At this time, the fund manages the capital equal to 8 million UAH.
In three months of the Fund’s operation, 76 business proposals seeking financing were submitted.