The Verkhovna Rada of Ukraine passed a law July 14 updating the country’s legal framework governing the operations of credit unions, laying the foundation for a level playing field for credit unions in the financial services market. These changes to the legislation will facilitate increased access to financing for underserved Ukrainians.
World Council of Credit Unions’ (WOCCU) International Advocacy and International Projects team, which implements the USAID Credit for Agriculture Producers (CAP) Project, provided extensive analysis, feedback and advocacy input for the bill.
WOCCU International Advocacy and the USAID/WOCCU CAP Project in Ukraine have been developing and advocating for the adoption of the new credit union law since 2016 in cooperation with the National Bank of Ukraine, which regulates credit unions, and the country’s two credit union associations.
WOCCU and the CAP Project also provided comprehensive support for updating the legislation by suggesting global best practices in credit union operations and regulations.
“We could not be happier for the credit unions World Council represents in Ukraine. The new law will strengthen the reliability of the sector and consumer confidence in it by expanding the availability of financial services credit unions can provide to the general public. Its adoption also paves the way for the introduction of deposit insurance for the credit union sector,” said Andrew Price, World Council of Credit Unions senior vice president of international advocacy and general counsel.
WOCCU and the CAP Project have also been providing technical assistance to amend the country’s Law on Deposit Guarantee Fund, making it possible for credit unions to join the system. The deposit guarantee system for credit unions in Ukraine is also 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.