Ukrainian CUs receive disbursement to resume agricultural lending in wartime
The U.S. Agency for International Development (USAID) and Worldwide Foundation for Credit Unions released the second and final disbursement from a $1 million liquidity fund to help partner credit unions affiliated with World Council of Credit Unions’ Credit for Agriculture Producers (CAP) Project resume agricultural lending and support food security in wartime Ukraine.
The second tranche of nearly $500,000 was disbursed to the Ukrainian United Credit Union (UUCU) and United Credit Union of UNASCU (UCU of UNASCU), the central financing facilities for Ukrainian credit unions. UUCU, UCU of UNASCU and the Worldwide Foundation, World Council’s charitable and engagement arm, signed agreements related to the liquidity fund in April 2021, with the first disbursement of nearly $500,000 released soon afterwards.
At the outset of the war with Russia, many credit unions working with agricultural and rural micro-, small- and medium-sized enterprises temporarily suspended their lending activities due to the uncertainty and high risk to both the institutions and their borrowers. But in order to ensure food security, agricultural producers in areas of western Ukraine less affected by the war began to express a demand for new loans.
The demand for agribusiness loans exceeds the supply—a trend that is expected to continue due to economic impacts caused by Russia’s invasion of Ukraine. This second tranche of funding will help close that gap and contribute to the food security of Ukraine and the world, given Ukraine’s key role in global agricultural production.