The very first credit union loan to a legal entity in Ukraine has been issued, thanks to the country’s new law on credit unions which was passed last year and came into effect on 1 January this year.
Credit Union Anisia in Lviv Oblast was able to issue Grammax Dairy Farm with a loan of UAH 950,000 (GBP £18,500) under the new law.
Previously, Ukrainian law only allowed co-operative financial institutions to issue loans to individual members, even if they operated businesses.
But following long-term advocacy efforts by the World Council of Credit Unions’ (WOCCU) International Advocacy team and the USAID/WOCCU Credit for Agriculture Producers (CAP) Project, the law now allows loans to legal entities such as Grammax Dairy Farm.
Grammax is run by Ruslan and Svitlana Onyshkevych, who have been individual members of Credit Union Anisia for years.
The ability to access this loan through their business has the potential to benefit the Onyshkevychs in a number of ways, including allowing them to treat the loan interest as a company expense. It also means greater transparency of accounting for the business, the creation of a credit history for the company, and more information for future lenders to the business.
The loan issued to Grammax Dairy Farm is a three-year line of credit, made possible by a $1 million (GBP £845,2900) USAID/Worldwide Foundation for Credit Unions’ Liquidity Fund. This fund has been running since 2021 to support Ukrainian credit unions affiliated with the CAP project expand their lending capacity, and has so far enabled more than 1000 loans to be issued to farmers in Ukraine.
