Ukrainian Parliament Approves New WOCCU-advocated Credit Union Law
In Ukraine, only large agricultural producers have full access to financial investments in the agricultural sector; as a result, small and medium-sized farms and individual entrepreneurs generally remain outside the financial system and are unable to obtain affordable credit. In this context, credit unions are the only source of funding for small farmers and agricultural producers. Yet, credit unions in Ukraine need support to strengthen their capacity and meet members’ needs, especially since the credit unions sector has lacked reform for more than 25 years.
The Credit for Agriculture Producers (CAP) Project in Ukraine began as a four-year project (2016-2020) funded by USAID and implemented by World Council for Credit Unions (WOCCU). In August 2020, USAID extended its funding for the project through March 2023.
The CAP Project's main goal is strengthening the Ukrainian credit union market, thereby expanding access to agricultural credit. CAP is working with the Regulator and legislators to improve the operational environment for credit unions in Ukraine, supporting the credit union Associations to better advocate for credit union interests and serve their members. CAP is also working directly with a group of credit unions to build their capacity to expand lending to rural and agricultural micro, small and medium enterprises. As of the end of CAP’s 4th year of activities, its partners extended 14,208 agricultural loans, surpassing the initial project goal of 10,000 new loans. Ultimately, Project aims at improving safety and soundness in the country’s credit union market, building a foundation for long-term growth and increased access to finance.
Building on the progress made to date, CAP will continue to support the improvement of legal, regulatory, and market environment for credit unions and help build the capacity of the credit union sector. This will enhance and support the credit union sector, as well as public and private stakeholders to weather the challenges posed by the COVID-19 crisis and sustainably expand their ability to close the demand gap for agrifinance in Ukraine.
The most recent quarter was a productive one for the CAP Project and its partner credit unions. Here is a list of the project's biggest accomplishments from April - June 2021.
Draft Law on Credit Unions (№ 5125) passed the first reading on June 1st – 267 Members of Parliament (MPs) supported the law.
Deposit Guarantee Scheme for credit union members, under development by CAP Project experts, National Bank of Ukraine (NBU) and Deposit Guarantee Fund (DGF)
Draft Law on Financial Services and Financial Companies (№ 5065) passed the first reading on April 27th with support of 247 MPs.
First Tranche of the Liquidity Fund received by the Ukrainian United Credit Union (UUCU) and loaned to qualified target credit unions.
127 agriproducers received loans for a total of UAH 10.5 million (USD 389,000) through nine CAP partner credit unions.
Digitalization · Customer Relationship Management (CRM) integration – provider selected to integrate the CRM system in 10 partner credit unions
Software Solutions – three All-Ukrainian Credit Union Association (AUCUA) credit unions signed an agreement with fintech NeoFin KIS for core banking system development.
875 agriloans amounting to UAH 43.6 million (USD 1.6 million) disbursed by partner credit unions in this quarter. Total of 14,208 agriloans disbursed during the life of the CAP Project.
Promotional Video Campaign to Mark Farmer’s Day Holiday in Ukraine – five videos produced about successful credit union loans to farmers in different regions of Ukraine.