Ukrainian CUs receive first tranche of $1M to increase agricultural lending
The U.S. Agency for International Development (USAID) and Worldwide Foundation for Credit Unions released an initial disbursement from a $1 million liquidity fund to the Ukrainian United Credit Union (UUCU), the central financing facility for 54 Ukrainian credit unions, to help partner credit unions address liquidity constraints and support increased agricultural lending.
This first tranche of funding follows the signing of an April 12 agreement between UUCU and the Worldwide Foundation, World Council of Credit Union’s charitable and engagement arm.
Many credit unions working with agricultural and rural micro, small and medium-sized enterprises (MSMEs) are seeking additional liquidity to meet the demand for loans from agricultural producers, which are in more need than ever for affordable and timely credit resources to support ongoing spring, summer and fall agricultural activities.
Demand for agribusiness loans remains higher than supply, with the gap widening due to challenges brought forth by the COVID-19 pandemic and the worsening economic conditions in Ukraine.
This first tranche of funding will help agricultural and rural MSMEs increase competitiveness and farm productivity to overcome the current challenges caused by both the pandemic and economic decline in the country.
“Expanding a credit union’s ability to serve more members and existing members better is part of our purpose to help transform a billion member lives worldwide,” said Mike Reuter, executive director of Worldwide Foundation for Credit Unions. “Our partnership with the USAID-funded CAP Project and the UUCU is another example of cooperating creatively to provide credit unions with the resources they need to serve members in the face of the COVID-19 pandemic.”
The USAID-funded CAP project will continue to monitor the utilization of the Liquidity Fund throughout the year and hopes to expand the number of credit unions that can access funding once the second tranche is disbursed toward the end of 2021.