KYIV, Ukraine–The president and CEO of the World Council of Credit Unions, Elissa McCarter LaBorde, met with representatives from the National Bank of Ukraine in this country’s capital to discuss ways to strengthen the country’s credit union sector through a more “enabling regulatory environment,” even as Ukraine remains under attack by Russia.
According to WOCCU, McCarter LaBorde’s meeting with the country’s credit union regulator came during a three-day trip to Ukraine that coincided with the launch of the new USAID/WOCCU GROW Project, a four-year activity designed to expand lending to micro, small and medium enterprises (MSMEs) by “creating a conducive environment for credit unions to operate, access more liquidity and improve their operational capacity.”
Looking to Streamline
WOCCU said McCarter LaBorde met with Serhii Savchuk, director of the NBU’s Department of Methodology for Nonbank Financial Institutions, and Mykhailo Fedorenko, director of the NBU’s Nonbank Financial Services Supervision Department, about proposals to streamline credit union regulations.
“Fedorenko specifically stressed the potential for credit unions to provide more lending to veteran-owned businesses to ensure the financial inclusion of military veterans during Russia’s full-scale war in Ukraine and the eventual post-war reconstruction,” WOCCU reported.
The World Council said veterans and women are two groups the GROW Project is specifically focused on providing with more business lending through credit unions.
Proposals for Reform
“Savchuk and Fedorenko both identified insufficient levels of automation, operational efficiencies, management systems, competitiveness and technological development as the major issues currently limiting the credit union sector in Ukraine,” WOCCU said.
The organization said they also discussed the NBU’s proposals to alleviate some of those issues, which include:
- Providing Ukraine’s United Credit Unions (UCUs) with the ability to offer uniform products and IT solutions that would allow credit unions to cut operating costs and focus on providing quality financial services. UCUs currently provide financing to help credit unions address liquidity concerns and increase loan portfolios, WOCCU said.
- Extending the provision of payment services by credit unions, including the ability to issue payment cards to members.
- Providing a technological update to credit unions, so they can provide modern services, build effective internal control systems and ensure transparency in their activities.
Achieving Goals
According to WOCCU, if implemented, Savchuk noted the proposals would help the NBU achieve its strategic goal of helping credit unions find their place as competitive institutions in the financial services market.
“Certainly, the inclusion of such institutions in the deposit guarantee system will contribute to the strengthening of the credit union market," said Savchuk in a statement. “However, the implementation of this initiative is only possible after the completion of military operations and other preconditions, including the successful completion of the market transformation.”
McCarter LaBorde also met with Olga Bilay, Acting Managing Director of Ukraine’s Deposit Guarantee Fund (DGF), about continuing the work to ensure credit union member deposits are eventually protected, WOCCU reported.
Support for Deposit Guarantees
The World Council said it has been supporting the establishment of deposit guarantees for credit unions in 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.
“This is an incredibly important time to show up and advocate for Ukraine’s credit unions,” McCarter Laborde said in a statement. “As they try to maintain the same level of services and operations during wartime, World Council of Credit Unions is committed to strengthening the environment in which they operate, while expanding their ability to provide loans to more women, veterans and other members who own and operate small businesses.”
Additional Meetings
WOCCU said that as part of her visit, McCarter LaBorde also met with representatives from the All-Ukrainian Credit Union Association (AUCUA) and the Ukrainian National Association of Savings and Credit Unions (UNASCU), WOCCU’s direct member organizations in the country, about WOCCU’s advocacy efforts and to “learn about other ways to support credit unions moving forward.”