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Representatives of Deposit Guarantee Fund (DGF) of Ukraine Wednesday presented the initial concept of a deposit guarantee system for credit union members at a round table for the sector organized by the USAID/World Council of Credit Unions’ Credit for Agriculture Producers (CAP) Project.
“We have been cooperating with the National Bank (of Ukraine) and the CAP Project for a long time to build the framework for deposit guarantees for credit unions. There have been a lot of discussions, events held with guarantee funds of credit unions in other countries, including NCUA (United States’ National Credit Union Administration). We have repeatedly revised and improved the parameters of the future system considering the information we received from the Project, and based on the results of the credit unions’ data analysis, and today we would like to present for your attention and discussion the concept of the deposit guarantee system to be introduced in Ukraine,” said Olga Bilay, DGF Deputy Director, in her opening remarks..
The concept for the deposit guarantee system for Ukrainian credit unions includes:
The CAP Project has been supporting the establishment of deposit guarantees for credit unions in Ukraine in collaboration with Deposit Guarantee Fund of Ukraine by providing technical assistance to amend the country’s Law on Deposit Guarantee Fund, making it possible for credit unions to join the system.
As part of this effort, the CAP Project also organized a field trip for four representatives of the Deposit Guarantee Fund (DGF), including two deputy directors, to visit two of the largest Ukrainian credit unions operating in Lviv Oblast. On April 24-25, the DGF representatives held in-person interviews with executive board members and loan managers of Credit Union Anisia and Credit Union Vygoda to discuss the existing challenges to their daily business operations, their contingency planning amid the war and the prospects for introducing the proposed deposit guarantee system for credit unions.
The CAP Project will continue its advocacy efforts to pass the amendments to the Law on Deposit Guarantee Fund. The deposit guarantee system for credit unions in Ukraine is key to the sector’s growth and to providing increased access to finance for underserved Ukrainians, including micro-, small- and medium-sized farmers. With government guarantees in place, credit unions will be able to mobilize more funds and channel them to serve more people in need of financing.