In Ukraine, the level of bank lending is low, which is a significant obstacle to the recovery of the country, according to former member of the NBU Council, Bohdan Danylyshyn.
Danylyshyn states that, during the war, the has IMF noted that bank lending within the Ukrainian economy significantly decreased from 18.8% of GDP in 2021 to 14.2% of GDP in 2023.
“This decline occurred even though preferential lending support programs account for about 13% of bank loan portfolios. The IMF points out that one of the reasons for the low level of lending is the channeling of banks’ funds into attractive deposit certificates of the NBU,” he noted.
The mobilization of credit resources should become an essential driver of private sector growth and a funding source for the economy’s significant investment needs in the post-war recovery period. Therefore, according to the requirements of the IMF, the NBU should develop a comprehensive strategy for credit expansion by May 2024.