MADISON, Wis.—The World Council of Credit Unions (WOCCU) and its Credit for Agriculture Producers (CAP) Project reported they have agreed to provide technical assistance and international best practice expertise to Ukraine’s Individual Deposit Guarantee Fund (DGF) in a joint effort to establish a deposit guarantee system for the country’s credit unions.
The CAP Project, funded by the U.S. Agency for International Development (USAID), signed a Memorandum of Cooperation with the DGF that also lays out a process through which CAP and WOCCU’s team of experts will help draft relevant legal and regulatory acts, while ensuring such a deposit insurance system is also in alignment with the European Union’s (EU) regulatory frameworks that pertain credit unions, the organizations reported.
“We are pleased to see the active engagement of the DGF in the development of a sound credit union market in Ukraine,” said Ewa Sierzynska, chief of party for the CAP Project. “Extending the DGF guarantee for deposits of credit union members will help reach the goal of building a strong and diversified financial sector in the country, especially for consumers.”
According to WOCCU, since its inception in 2016, the CAP Project has played a central role in providing expertise and coordination to credit unions as the only project solely dedicated to the comprehensive development of the sector in Ukraine.
‘Better Protection’
“Not only will a deposit guarantee system offer better protection for members, the participation of the DGF will also strengthen the regulatory framework for credit unions in line with EU and international standards. Ultimately this will contribute to improved financial services for the citizens of Ukraine,” said Andrew Price, WOCCU’s senior vice president of international advocacy.
The World Council said the aim is to establish a deposit guarantee system for credit unions by January 1, 2023. Cooperation between CAP and the DGF, in coordination with the National Bank of Ukraine—which regulates the country’s credit union sector—will help ensure an enabling environment for the creation of such a system and strengthen the continued development of Ukraine’s credit union sector.
“I am convinced that our cooperation within the memorandum will help, among other things, to implement the best world approaches in this area,” said Svitlana Rekrut, managing director of the Deposit Guarantee Fund.