“Any business is a challenging one right now in Ukraine.” -Serhii, a farmer in western Ukraine
When Russia began its full-scale invasion of Ukraine in February 2022, Ukraine’s economy shrank by about one-third—the largest annual fall in more than 30 years of Ukrainian independence. 18 months after the war began, Ukraine’s economy ministry reported that their gross domestic product grew by 2.2% year-on-year in the first seven months of 2023.
This is welcome news, but the stark reality remains: It’s challenging to do business in a country at war.
Recently, we spoke with several entrepreneurs served by HOPE Ukraine in the western part of the country. While they are far from the frontlines of the conflict, their businesses have not escaped the ripple effects of war: inflation, displaced people, blocked ports and trade routes, disrupted supply chains, and the ongoing fatigue of living with air raid sirens and the realities of a country under attack.
But even amid uncertainty, work must continue. Here are some of the challenges—and opportunities—Ukrainian entrepreneurs are facing:
The Ukrainian workforce is scattered.
Olga, a pediatric doctor who owns and operates a pediatric clinic in western Ukraine, shared: “One of the challenges to my dreams [for my business] is the lack of specialists that I can hire. … The problem is that everyone goes to large cities like Lviv and Kyiv, and they find jobs there.”
Millions of Ukrainians are living as refugees in Europe or the U.S. And while many Ukrainian refugees continue to return from abroad, some can’t return home due to Russian occupation or proximity to the frontlines. Many internally displaced people (IDPs) must make a living in new communities.
Artem, who has grown his two restaurants with financing from HOPE Ukraine, has felt called to offer IDPs in his community good jobs: “Our priority is to provide them with work. We know that it is difficult for them in a new place. … Some came with nothing at all.”
Exporting—especially crops—is almost impossible.
Since July 2023, a safe-passage deal for shipping in the Black Sea expired, and Russia resumed its bombing of Ukrainian ports. Neighboring countries like Poland and Slovakia have also blocked Ukrainian grain imports to protect their own farmers. This has put Ukrainian farmers in a difficult position: sell now for half the price or wait and hope that prices go up.
Serhii began farming just months before the invasion. Loans from HOPE Ukraine have helped him finance much-needed equipment he wouldn’t have had the capital for otherwise because commercial banks wouldn’t lend to him due to how recently he started farming.
Before the war, the agricultural space was one of the most profitable. It allowed you to earn a lot and provide for your family … but the prices for crops have dropped significantly. This year will be rather hard for us.
Local supply chains have been disrupted by bombings.
While exporting crops is challenging, even moving goods and food around the country has been difficult—and dangerous.
Recently, a drone strike hit a warehouse in a nearby city, and restaurant owner Volodymyr lost his main flour supplier. He is still looking for a reliable and affordable option to supply the flour he needs for his pizza and sushi restaurant.
As Ukrainians have adjusted to a new way of doing business, some entrepreneurs have seen new opportunities and needs that they can help with.
Mykhailo, who owns a transportation company and cement distribution warehouse, shared with us that “goods from the south and east must be moved to the west. And so the demand for our services is growing. And I know it’s not only in my business—it happens in many areas.” To help meet these transportation needs, he used financing from HOPE Ukraine to buy a new truck—and he’s almost finished paying the loan off!
Even amid challenges, there is hope—and opportunity.
Despite the uncertainty and low prices of the grain market, Serhii is confident in the need for good farmers to continue their work.
I do have this hope for a better future, that our crops will be in demand again in Europe. The world needs food.
Volodymyr finds joy in cooking and offering his community a place to enjoy good food.
My inspiration is my customers: when I see them happy and satisfied. … That’s our biggest motivation: to know that we’re doing the right thing.
And business owners like Mykhailo are grateful for the support and partnership they’ve experienced through HOPE Ukraine. “We’re grateful for the finances we get that are not a burden to us. The conditions are very favorable. And they take into consideration the situation here.”
Since the start of the war, HOPE Ukraine has continued to serve hundreds of entrepreneurs and farmers, investing more than $2 million in loans to help them keep their businesses open, retain employees, and help keep their local economies strong.
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