LVIV OBLAST, Ukraine– Credit Union Anisia has issued the very first credit union loan to a legal entity in Ukraine as the result of efforts the World Council of Credit Unions said it and the USAID/WOCCU Credit for Agriculture Producers (CAP) Project said they have led.
According to WOCCU, the CAP Project and its international advocacy efforts were instrumental in making the loan possible as the result of their input on the new Law on Credit Unions in Ukraine, which took effect on Jan. 1.
“Prior to this year, credit union legislation in Ukraine was outdated and allowed cooperative financial institutions to issue loans only to individual members, even if they operated businesses,” WOCCU reported.
After a thorough review of all policies and procedures with assistance from the CAP Project, WOCCU reported CU Anisia prepared its first legal entity loan and issued it to Grammax Dairy Farm. The farm is run by Ruslan and Svitlana Onyshkevych, who have been individual borrowers of the credit union for years.
The Benefits
By taking a loan as a legal entity, the farmers get a number of benefits they didn’t have before, according to WOCCU, including:
- The possibility to treat the loan interest as a company expense.
- Simplified crediting of funds to the company's account and transparency of accounting.
- The creation of a credit history for the company.
- Complete balance sheet information, which facilitates the company’s financial condition analysis for other lenders.
Three Year Line of Credit
The first UAH 950,000 (approximately US $24,000) loan was issued to Grammax Dairy Farm as a three-year line of credit, thanks to the $1 million USAID/Worldwide Foundation for Credit Unions' Liquidity Fund, which ensures liquidity for lending to Ukrainian farmers through credit unions, WOCCU said.
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