Funds of credit unions may serve as an additional financial source for small agricultural producers. Using services of those establishments, agrarian workers will be able to receive a credit, whose rate is 5-10% down against a commercial bank.

President of the Ukrainian Agrarian Confederation Leonid Kozachenko has said at the international conference “Role of Credit Unions in Social-Economic Development of Territorial Communities,” UKRINFORM reports with reference to Latifundist.

“Credit unions are a very convenient organization, since it will be easier for representatives of small business to get a credit there, whose rate is 5-10% down against a commercial bank. Unfortunately, in Ukraine, there are about 1% of economic entities, mainly representatives of the agrarian sector, who use this service. For comparison, in Germany, this index makes up 50%, in France - over 40%,” the head of the Ukrainian Agrarian Confederation has said.

He also noted that credit unions are more convenient for those, whom they finance, therefore as a rule, borrowers invest their funds in those establishments. This is of great importance, since due to this credit unions enjoy a high level of trust.

A borrower undergoes less examinations, and the necessary funds are granted more operatively against bank institutions. However, the volumes of financing are small, mainly UAH 10,000-15,000, Kozachenko added.

“The largest problem, which hampers development of small and medium-size agricultural producers, is absence of financing. Credit unions may solve this problem,” he underscored.

In his conviction, credit unions will be able to help in settlement of many problems, including social problems, in the rural locality. Their creation will be advisable within the frames of the project “Native Village,” which provides for development of agrarian cooperation, the Confederation head believes.

Ukrinform