Ukrainian Parliament passes new law for credit unions
WOCCU advocated for changes that will allow for future growth of the sector
MADISON, WI (July 18, 2023) — The Verkhovna Rada of Ukraine on July 14 passed a law 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.
- Expands the list of services credit unions can provide to their members, including currency exchange and certain types of payment services.
- Expands access to finance through credit unions for certain legal entities (farms, cooperatives, trade unions, micro enterprises, housing cooperatives, religious organizations).
- Strengthens licensing, corporate governance and capital requirements in credit unions.
- Expands the ways credit unions raise capital, including through subordinated debt.
- Establishes stabilization and liquidity support funds for credit unions at the level of united credit unions, the central financing facilities.
- Improves procedures for credit union mergers, acquisitions and other voluntary reorganization.
WOCCU International Advocacy and the USAID/WOCCU Credit for Agriculture Producers (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.
This document was produced for review by the United States Agency for International Development. It was prepared by WOCCU for the USAID/Credit for Agriculture Producers (CAP) Project in Ukraine, agreement number AID-121-LA-16-00002.
Verkhovna Rada building (parliament house) in Kyiv, Ukraine
About World Council of Credit Unions
World Council of Credit Unions is the global trade association and development platform for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 90 countries. Worldwide, 82,758 credit unions in 97 countries serve 404 million people. Learn more about World Council's impact around the world at www.woccu.org.