USAID INVESTMENT FOR BUSINESS RESILIENCE (IBR) ACTIVITY — YEAR 2 WORK PLAN

The program focuses on several key components, including market regulation, supervision, and financial infrastructure. Component 1 of the program supports the development of laws, regulations, and government policies required to streamline the EU accession process, expand SMEs' access to finance, and improve the export framework. The main objectives of Component 1 are to align legislation with the EU acquis, remove legal and regulatory obstacles for financing businesses via financial intermediaries, facilitate export activities through enhancement of the regulatory framework, and enhance the supervisory capacity of the National Bank of Ukraine (NBU). The anticipated activities of Component 1 can be divided into several groups, including activities dedicated to unlocking bank lending to Ukrainian businesses, streamlining NBFIs' functioning and availability of alternative finance mechanisms, streamlining investments in Ukraine, and providing technical assistance for transactional support. Activities dedicated to unlocking bank lending to Ukrainian businesses include reviewing the legal and regulatory obstacles for financing businesses via financial intermediaries and improving distant access to financial services by supporting the NBU in assessing BankID, its electronic identification system, for compliance with EU regulations on distant access to financial services. Component 1 also focuses on streamlining NBFIs' functioning and availability of alternative finance mechanisms, including the development of trade factoring, leasing activities, and regulatory field to combat late payments. The development of trade factoring involves preparing the Ukrainian legislative framework regulating factoring activities and providing a second opinion on the legislative act developed by the NBU together with the European Bank of Reconstruction and Development. The development of leasing activities in Ukraine involves analyzing EU leasing regulatory models to find a suitable deregulation solution for Ukraine and engaging in subsequent activities dedicated to the implementation of the required solution. The program's activities are aimed at achieving several key outcomes, including the alignment of legislation with the EU acquis, the removal of legal and regulatory obstacles for financing businesses via financial intermediaries, the facilitation of export activities through enhancement of the regulatory framework, and the enhancement of the supervisory capacity of the NBU. The program's expected results will align with the objectives of Component 1 and Component 3, and will support the development of Ukraine's financial sector and its integration into the EU. The program's geographic focus is Ukraine, and its implementation timeframe is from January 1, 2024, to September 30, 2024. The program's recommendations are based on the European Commission's analytical report prepared in February 2023, which provides a list of recommendations to align banks and conglomerates, financial markets infrastructure, and security markets and investment services with EU requirements. The program's activities are aimed at implementing these recommendations and supporting the development of Ukraine's financial sector.