Money is available: where and why Ukrainians borrow it
10 November 17:24
Ukrainians have no problems with where to borrow money. Those who want reliability and are not afraid of special banking requirements go to banks to get money. Those who need money quickly and without unnecessary bureaucracy turn to microfinance organizations. Komersant found out how non-bank financial institutions work and what exactly Ukrainians borrow money for.
Instant transfer, fast processing, and receiving money at any time of the day are exactly what Ukrainians expect when they need money “here and now.” They make their choice based on this.
Consumer choice
It is much easier to get a loan from a microfinance organization (MFO) than from a bank – this is the general assessment of borrowers in a consumer microcredit survey conducted by the Association of Ukrainian Banks in cooperation with Research.ua and the Institute of Sociology of the National Academy of Sciences of Ukraine. Moreover, more than two-thirds of respondents say that if they are denied a bank loan, it is possible to get one from an MFI. In other words, simplicity, speed and accessibility are key arguments for borrowers who turn to these institutions.
According to the survey results, the vast majority of microfinance users continue to take out microloans for their daily needs. Accordingly, the sociological monitoring of the Institute of Sociology has recorded a difficult picture of the well-being of Ukrainians in 2025.
During the presentation of the study, Serhiy Dembitsky, Deputy Director of the Institute, said, in particular, that about a third of Ukrainians save, borrow or apply for financial assistance to buy food, about 40% to pay utility bills and budget appliances, and three-quarters of our fellow citizens to buy new large household appliances.
According to Yuriy Borshch, project manager of the Association of Ukrainian Banks’ Financial Literacy Education Initiative, Ukrainians mostly use microloans responsibly.
“It is primarily about covering basic daily needs: “to survive until the next paycheck”, to pay for medical treatment or utilities. This proves that consumer microcredit is an inclusive, socially important financial instrument,” the expert notes.
Referring to the survey data, he also states that “73% of users of microfinance organizations are satisfied with the service, 69% are ready to recommend their lenders.”
Market adaptation
In Ukraine, control over the activities of MFIs is currently within the purview of the National Bank. It is the NBU that establishes the “rules of the game” in this market and monitors their compliance. The NBU issues licenses to microfinance organizations, can revoke them in case of violations, monitors compliance with consumer rights, and is also responsible for the register of microfinance organizations. It is on this resource that consumers can and should check whether an MFI has a license to operate.
Alla Saviuk, President of the All-Ukrainian Association of Financial Companies, states that the number of MFIs on the market is decreasing.
“It is as difficult for microfinance organizations as it is for all Ukrainian businesses. Some players have left the market: as of the beginning of July 2025, only 303 institutions were operating, which is a quarter less than last year and more than half as many as since the beginning of the full-scale war. This is a consequence of both the macro situation and tighter regulation. The NBU has implemented effective measures to improve the financial system: it has introduced requirements for corporate governance and internal control in financial companies, new risk management standards, switched to monthly reporting, and updated the rules for working through credit intermediaries. For bona fide participants, this increases transparency, but also increases the operational burden. At the same time, the market capacity is shrinking: the war, mobilization, and forced migration are ongoing,” explains Alla Saviuk.
Ukrainian microfinance organizations are also adapting to the newly introduced innovations in their work, primarily the limitation of the maximum daily interest rate to 1%.
How has this affected the situation with microcredit? Alla Saviuk, President of the Ukrainian Association of Financial Companies, explains.
“While before the legislative restrictions, market participants had an increased appetite for risk (short terms, aggressive borrowing, etc.), with the introduction of the 1% limit, companies were forced to revise their business models, refine scoring (a system for assessing a client’s solvency – ed.), introducing higher approval thresholds, practicing deeper work with credit bureaus, and using behavioral models. We also had to strengthen the anti-fraud system (a system designed to detect fraudulent schemes – Ed.). Thus, there was a shift from “fast and expensive” solutions to more structured products with a predictable cost for the client. As a result, customers now report greater accessibility of microloans,” the official says.
This is also confirmed by the data of a consumer microcredit survey conducted by the Association of Ukrainian Banks in cooperation with Research.ua and the Institute of Sociology of the National Academy of Sciences of Ukraine. Yuriy Borshch, project manager of the UBA’s Financial Literacy Education Initiative, says.
“The regulatory limitation of the interest rate to 1% has become a systemic incentive for the development of a civilized market. According to the survey, 54% of respondents believe that this has not worsened the availability of loans, and among MFI clients, 59% are convinced that loans have become more affordable and attractive,” the expert notes.
The NBU also positively assesses the effect of the restrictions. Volodymyr Sukhanov, Director of the Department for Supervision of Non-Banking Institutions of the National Bank of Ukraine , states:
“If you look at the composition of market participants, the cost of a loan after the daily rate restriction has dropped significantly. I do not know of a single financial institution that has become unprofitable. In terms of lending, companies have almost caught up with pre-war volumes.”
Another step planned to be taken in the interests of consumers is the introduction of remote identification and verification of MFI clients through official state online services. According to the Association of Ukrainian Banks, the availability of these tools in the microcredit market, where each transaction should be as safe, fast and clear as possible, is extremely necessary, as it will mean increased convenience, personal data security and reduced fraud risks for consumers.
Andriy Dubas, President of the UBA, also believes that the rules in the market, if it is consumer lending, for example, from banks and non-bank institutions, should be the same.
“If these are verification or identification tools, if they are available to users of insurance services or banking services, they should be available to other organizations, but only if they have a license,” the official said.
The EBA hopes that verification through Diia for clients of microfinance organizations will become possible in the near future. Olha Vasylevska-Smahliuk, Deputy Head of the Parliamentary Committee on Finance, Taxation and Customs Policy, Head of the Subcommittee on the Functioning of Payment and Information Systems and Prevention of Money Laundering, for example, predicts that verification through the Diia app will be restored by the end of the year.
“Gray” players and collectors
This year, Ukrainian MFIs signed a Memorandum on ensuring responsible lending. This document, according to Andriy Dubas, President of the Association of Ukrainian Banks, is a kind of “list of white companies” that adhere to the norms and principles of transparent operation established by law. But in addition to the “white” ones, there are also “gray” players who operate without a license and create many problems in the non-bank lending market.
“They destroy trust,” is how Sergiy Sinchenko, chairman of the Association of Ukrainian Banks’ Committee on Non-Bank Lending and CEO of Monyveo, assesses their negative impact.
“Trust is the main component of any business, and these companies that lend in crypto, they are not licensed, they are not regulated, they are not limited in advertising, they are not limited in interest, they are not limited, which is the worst, in collections, and they can use the most unethical ways to collect debts. They cast a shadow over the entire market,” emphasizes Sinchenko.
The image of microfinance organizations is also severely damaged by collectors who go beyond the limits of what is permitted in their relations with debtors. As a result, today most market players are gradually refusing to engage external collection companies. Alla Saviuk, President of the All-Ukrainian Association of Financial Companies, points out this trend.
“The main reason is the impossibility of full control over the contractor’s actions in relation to the entire pool of transferred contracts. Even if ethical standards and sanctions are in place, individual employees of contracting agencies may use unacceptable methods of communication. At the same time, by law, all risks and reputational consequences are borne by the lender itself. That is why companies are increasingly using their own internal departments to deal with overdue debts, relying on loyal settlement mechanisms such as restructuring, partial forgiveness, and flexible payment schedules,” says Alla Saviuk.
According to her, this approach allows to retain the client, increase the level of voluntary repayment and at the same time minimize ethical and compliance risks.
Common standards of behavior for financial institutions, ranging from transparency of lending terms to improving financial literacy and inclusion, are defined in the aforementioned Memorandum on Responsible Lending. The Association of Ukrainian Banks monitors the implementation of the principles of the Memorandum and creates an open database of “white companies” that operate transparently. This database can also serve as a guide for consumers on who to deal with.
The Memorandum on Ensuring Responsible Lending is open for signature. A few days ago, two more financial companies joined it.
Author: Sergiy Vasilevich
