The state intends to provide 100 thousand hryvnia to low-income citizens as part of a plan to support them

The Ministry of Social Policy relaunched the Helping Hand program, which was once developed with the participation of the World Bank. It is designed to help unemployed Ukrainians from low-income families start their own businesses. In particular, the program provides for the provision of one-time interest-free repayable assistance to non-working able-bodied individuals. The loan amount is 15 times the minimum wage, in 2023 it is 100.5 thousand UAH. Money is provided for the purchase of equipment and materials necessary to start your own business.

• or upon expiration of a three-year period from the date of its receipt in one amount (within 30 calendar days);
• or ahead of schedule, in parts, in accordance with the schedule agreed with the employment center.
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  • application for financial assistance;
  • business plan;
  • a certificate of good conduct. It is important that the amount of the refundable loan is reduced by the amount of taxes and fees paid. Besides,  Financial assistance does not need to be returned if, thanks to it, the entrepreneur:
    • taxes, fees and a single social contribution have been paid in an amount exceeding the amount of assistance provided;
    • in the first year from the date of receipt of assistance, at the direction of the employment center, at least 2 people from low-income families were employed for a period of at least two years.

    Documents, business plan: how to apply for an interest-free loan

    Able-bodied Ukrainians from among low-income families, registered at the employment center as unemployed, who have a desire to open their own business, must submit to the employment center:

• The loan may not be repaid if in the first year it is possible to employ two unemployed people from low-income families

  Next, the diagram is as follows:

  1. The Employment Center prepares documents and submits them for consideration by the commission on issues of providing assistance to obtain economic independence for a low-income family. The commission includes representatives of the employment center, social protection authorities, local government, territorial departments of the State Tax Service, employer organizations and trade unions (by agreement).
  2. The commission reviews the documents and after the meeting sends the applicant a written notification of the decision.
  3. If the decision is positive, the person must create a legal entity or register as a sole proprietor within 30 calendar days from the date of receipt of the notification.
  4. An agreement on the provision of financial assistance is concluded between the interregional/regional employment center, the employment center and the person who has expressed a desire to carry out entrepreneurial activities.
  5. To receive assistance for the purchase of equipment and materials, a person submits to the employment center an invoice (invoice, receipt, delivery note, etc.) and an agreement concluded with the supplier (seller) of equipment and materials.
  6. The interregional/regional employment center transfers funds for the purchase of equipment and materials to the settlement account of the supplier (seller).

  

  A sense of responsibility, strategic thinking: why not everyone can run their own business

  Not all people are able to generate creative ideas , which mean a lot for a successful business. Moreover, not everyone is able to prepare a realistic business plan that will interest an investor. In addition, attracting loans and running a business requires a person to be psychologically ready to take responsibility, which, unfortunately, is not acquired on its own over the years.

• “In the adult psyche there is the concept of delayed reward: a person realizes that in order to receive a salary, he must go to work for half a month before the advance payment or a month before the salary. If you give a child a credit card, he will spend it at a toy store. Very often, people who thoughtlessly take microloans have childish patterns: I want to have fun here and now. Money is about responsibility. That is, there must be experience of independent living and the habit of taking responsibility for the consequences of one’s actions ,” psychologist Taras Nesterenko tells Focus .
• 
• At the same time, starting a business is associated with the risk of “burning out” and losing everything. And for a low-income person, this is a serious argument to think three times before starting your own business. Thus, according to the law on state social assistance to low-income families, a low-income family is a family that, for good reasons or reasons independent of it, has an average monthly total income lower than the subsistence level for the family . Such families have the right to state social assistance, the amount of which depends on the total average monthly income of the family.
• It is now impossible to create a detailed portrait of a low-income family in Ukraine, he says Focus Ella Libanova, director of the Mikhail Ptukha Institute of Demography and Social Research of the National Academy of Sciences of Ukraine, - there is not enough data since 2021. But the general formula is this: low-income people are people “who salary or pension is enough only for food “They can’t even pay for utilities,” explained Focus sociologist Viktor Nebozhenko.

  Low-income people may fear that the business will fail and they will not be able to repay the funds

  Therefore, for a person who does not have a sufficient financial cushion, loans for his own business are not an option. “People are afraid that if they fail, they will have to return the funds received, which will further worsen their financial situation,” Alexander Khmelevsky, candidate of economic sciences and independent expert, shared his thoughts with Focus

  On the other hand, help from the state can become support for some citizens, psychologist and psychotherapist Anna Krailyuk Focus “The category of low-income people is very broad. If these are young people who grew up in such families, but really want to break out into a different quality of life, I think they have every chance to study, work hard and end up with a successful business ,” she is convinced.

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• At the same time, a person who has received government assistance for a long time is unlikely to be ready to take responsibility for his future and the future of other people, Krailyuk continued. In her opinion, this probability is higher if a person has internal motivation - for example, the desire for a better fate for their children.
  

  Loans are not a panacea: will the Ministry of Social Security program affect the unemployment rate?

  The government developed the “Helping Hand” program together with the World Bank, in 2016 -2018. it was piloted in a number of regions and has established itself as a successful social project, assured .

• “During its operation, several hundred people in several areas were able to use it. There are positive cases where the program has enabled people to start their own business . However, it cannot solve the problem of unemployment and poverty in Ukraine,” Alexander told Focus .
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• However, there is no confidence in the continuation of this program for 2024 and 2025. “Formally, there is a program. But everything depends on the actual availability of funds in the Single Treasury Account. Next year we have uncertainty about macro-financial assistance from our partners. The Americans have postponed making a decision on assistance to Ukraine. Today, physically, next year there is not enough of the assistance that we expect - and this is the amount of 40 billion dollars - 29 billion dollars.  If the issue of macro-financial assistance is not resolved, then next year there will be no no support for anyone“,” noted Focus economist Oleg Pendzin.

  Now the aid to Ukraine worth UAH 29 billion for next year is in question. If money cannot be found, the government will have to cut government programs

  In addition, a 100 thousand UAH loan is a small amount of finance, the economist is convinced. “They can help a self-employed person start something. By and large, you won’t create a job with that money,” Pendzin added.

  However, it is obvious that the government itself does not expect a big breakthrough from the program, says Alexander Khmelevsky. “The Cabinet of Ministers allocated only 9.6 million hryvnia for this program, which will provide assistance to only about 100 people throughout Ukraine . Therefore, this program is aimed more at maintaining the image of the authorities than at a real solution to the socio-economic problems of Ukraine,” the specialist concluded.