Archive 2006

• 01.12.2006

  Credit unions in Ukraine: The immediate priority should be stability, not growth

  (Code:V16)

  The credit union sector is expanding rapidly in Ukraine. From June 2005 to June 2006, outstanding loans more than doubled. Measured by capital, credit unions represent nowadays 3.3% of the consolidated banking and credit union system. But the credit union sector remains beset with deep and serious structural problems. In particular, the solvency of several credit unions seems to be rather fragile, which in turn makes their deposits unsafe. Besides, credit unions provide mainly short-term consumer loans for purchasing long-lived goods in cities. Thus, they do not contribute much to the development of small business and of rural areas, as is the case in most countries. Consequently, the recent growth is not necessarily a good thing. In fact, it might have increased the size of existing structural problems.

  Attached file  (64.8 kb)
  Authors:  Kravchuk Vitaliy, Джуччі Рікардо
  Tags:  Center of economic research, German advisory group