Credit union assets in Ukraine increased in the second quarter of 2023 for the first time in nearly two years, according to the most recent Non-Bank Financial Sector Overview published Monday by the National Bank of Ukraine (NBU)—the country’s credit union regulator.
Assets grew steadily in most credit unions despite a reduction in the actual number of credit unions—from 211 as of June 30, 2021, to 121 as of June 30, 2023.
“New loans increased for the second time in a row – by almost a third in the quarter,” stated the NBU in its release. “The financing from the United Credit Unions increased by 12%, and the outflow of funds slowed down significantly.”
In total, Ukrainian credit unions disbursed UAH 591.7 million (US $16M) in loans in the first half of 2023, which is 22.8% more than during the first half of 2022. Two United Credit Unions (UCUs)—credit union financing organizations operating in Ukraine—collectively disbursed UAH 45 million (US $1.2M) in loans to their member credit unions. 61% of all loans disbursed by the UCUs were made possible by the USAID/Worldwide Foundation for Credit Unions (WFCU) $1 million Liquidity Fund, implemented by the USAID/WOCCU Credit for Agriculture Producers (CAP) Project in Ukraine.
The Liquidity Fund mechanism has proved efficient during the times of major crises, such as Russia’s ongoing full-scale war against Ukraine, to provide affordable finance to agricultural producers through the country’s credit union system. To build on this success, WFCU and the CAP Project have launched the $500,000 Resilience Initiative to reach vulnerable groups of entrepreneurs, including women, wartime evacuees returning home and those displaced by the war, and to promote sustainable finance in Ukraine using the same external financing mechanism.
The financial and technical support provided to the Ukrainian credit union system by international partners, including the USAID/WOCCU CAP Project and WFCU, will help further strengthen the credit cooperative movement in Ukraine and make it possible for credit union member communities to continue recovering from the consequences of the war.