CAP Project Helps National Bank of Ukraine Set Regulatory Framework for Credit Unions
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 11,527 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.