Ukrainian credit unions seek help to meet growing credit demand.
World Council of Credit Unions’ board of directors recently met wiht leaders of its member organization, Ukrainian National Association of Savings and Credit Unions (UNASCU), in Lviv, Ukraine, to better understand challenges facing the nation’s credit unions.
“Since 1992, World Council has worked to grow and strengthen Ukraine’s credit union system,”said Brian Branch, World Council President and CEO. “Despite Various Challenges, we have come a long way and will continue to provide support.”
UNASCU President Petro Kozynets and CEO and General Manager Ludmila Kravchenko explained how current issues, including political conflict, shifting regulatory and accounting requirements, shortage of liquidity, declineing growth and low consumer awareness, have impacted credit unions’ ability to serve their members.
“Naturally credit unions have much more trust than the banks, so there is and opportunity for their expansion,” Kozynets said. “Yet, the overall situation very much depends on when the war is over.”
The immediate goal of the movement is to find new sources of funds. Credit unions and UNASCU look for external borrowings to meet the demand for credit. Another priority is the legislative and regulatory framework for credit unions.
A series of financial and political crises, including recent conflict with Russia, have significantly impacted working families and the credit union footprint. Over the past six years, a combination of political situation, a threefold devaluation of the Ukrainian currency and uncertainty has led to the loss of 1.7 million credit union member and over 70% of assets. Nevertheless, credit unions remain optimistic about their role to help people in a context where banks are cutting down their activities.
To learn more about issues affecting the local sector, the World Council delegation also visited Anisia Credit Union, foundd by representatives of the Ukrainian Orthodox Church iin Lviv.
Ukrainian credit unions are most prevalent in provincial cities and rural areas. They remain relatively small with total assets of US$197 million, and respond to the common person’s demands for consumer finance, appliances and education. Ukrainian credit union finance self-employment and small business. They are often the only institutions financing small in rural villages
The Ukrainian government is working with credit unions to develp sounder regulatory systems and to continue financiang agriculture. World Council continues discussions with the Polish credit union movement and USAID for larger, credit union-focused programs.
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