Purpose.
To support sustainable economic development by strengthening the capacity of Ukrainian credit unions in expanding agricultural lending, thereby contributing to increased employment and income opportunities in rural communities in Ukraine.
Objectives:
- creating an enabling environment to support the early reconstruction process
- expanding the scope of digital financial service provision by credit unions
- implementing appropriate mechanisms for the management of the Liquidity Fund by the united credit unions of Ukraine, and preparing to attract additional liquidity to the credit union market
- assisting credit unions in expanding their portfolio to finance agribusiness and micro-, small- and medium-sized enterprises (MSMEs) in rural areas.
The implementation of the CAP Project involves the provision of international technical assistance, including the development of draft laws and regulations of Ukraine, and organizing and conducting training and expert sessions.
Products implemented for the NBU, and key events:
- strengthening the NBU’s regulatory and supervisory functions over non-bank financial institutions:
- consultations were held and proposals were provided on:
- regulations on information disclosure in the credit union sector, which were taken into account when developing the Resolution of the Board of the National Bank of Ukraine No. 114 dated 5 November 2021 (as amended)
- models for supervising credit unions that will be taken into account when developing the NBU’s regulations on the regulation and supervision of credit unions;
- a number of workshops and expert sessions were held to study the best international practices regarding:
- credit union capital structure, share capital, the management of a credit union, internal controls and compliance, the peculiarities of control and management of compliance risk in credit unions compared to banks, the system of monitoring credit unions’ activities, the problematic issues of transferring mandatory share contributions of insolvent credit unions, the inclusion of credit unions in the deposit guarantee system, liquidity management of credit unions, investor shares, and the introduction of a countercyclical capital buffer in credit unions
- conceptual comments and proposals were provided to the draft laws of Ukraine On Credit Unions (No. 3254-IX dated 14 July 2023) and On the Individual Deposit Guarantee System (No. 4452-VI dated 23 February 2012)
- a conference “The Work of Credit Unions in the Context of the New Law of Ukraine On Credit Unions” was held (16-17 November 2023)
- assistance was provided in studying the experience of credit union regulators in Lithuania, the United States, and Poland in regulating non-bank financial institutions
- proposals were received on the model of a deposit guarantee system for credit union members that could be implemented in Ukraine
- current results of activities related to the establishment of the Credit Unions Liquidity Fund were presented. The information received will be used to prepare proposals to increase the opportunities for business entities to carry out transactions with credit unions, and will be taken into account when finalizing the draft Law of Ukraine On Credit Unions
- expert consultations were held on the development and implementation of reporting models for credit unions
- proposals were provided for updating the Strategy for the Development of the Financial Sector of Ukraine until 2025
- clarifications on the liquidity support system and the stabilization fund of Lithuanian central credit unions were provided to develop the concept of peculiarities of regulating the activities of united credit unions
- expert meetings were held and a draft structure of model articles of association for credit unions was developed.
- expert support provided by the CAP Project to the NBU’s emergency requests caused by russia’s military aggression:
- recommendations were received on approaches to regulating credit unions in crisis conditions in Ukraine
- consultations were provided on:
- searching for financial donors, maintaining the liquidity of the credit union market in wartime, and plans to restore financial stability
- creating conditions for the resumption of the credit union market and their solvency in the post-war period
- developing mechanisms for withdrawing from the market credit unions the activities of which are economically unviable in the context of the financial crisis, or which pose significant risks to their depositors, as well as mechanisms for settling overdue receivables, including overdue loan portfolios
- materials (comments) were provided on the risks in the activities of credit unions and supervision processes due to the current military aggression of the russian federation
- a working meeting was held to develop recommendations for credit unions on plans to restore financial stability, and further actions in this area were agreed upon.
- strengthening the NBU’s institutional leverage and Ukraine’s presence in the international arena:
- the NBU’s membership of the International Credit Union Regulators Network (ICURN) was supported
- the participation and speech of an NBU representative at the International Credit Union Regulators Network Conference (ICURN Conference) in 2022-2024
- the participation and online speech of an NBU representative at the World Conference of Credit Unions on the current situation in the Ukrainian credit union market, as well as the necessary assistance and prospects for the recovery and development of Ukraine, held on 17-21 July 2022 in Glasgow (Scotland, UK) was supported
- a virtual roundtable discussion “Promoting Ukraine’s Resilience and Restoration through Credit Unions” was held with the participation of Oksana Markarova, Ambassador Extraordinary and Plenipotentiary of Ukraine to the United States, representatives of the National Credit Union Administration (NCUA), U.S. military credit unions, and the Ukrainian credit union diaspora in the United States.