Best of all, loans are canceled at large enterprises, worse – law enforcement.
For 2014-2015 credit unions (CS) issued to the Ukrainians about 4 billion UAH of loans, the president of the All-Ukrainian Association of Credit Unions (WAKS) Victoria Volkovskaya told Vesti.
“This is not enough on a global scale, but considering that the niche of the COP are people with incomes below the average, 3-4 thousand UAH is a very decent amount,” she said.
Thus, according to the official data of the National Financial Services Commission, the volume of loans provided by unions has been steadily decreasing over the past few years: in 2012, they credited people with UAH 2.7 billion of loans, in 2013 with UAH 2.6 billion, and in 2014. – 2.2 billion UAH.
At the same time, the number of operating COPs did not decrease significantly, as in the banking sector (where a third of institutions became problematic). Today, about 580 such financial institutions operate, while in 2013 there were 624 of them.
One of the reasons for the decline in lending was the decrease in average loan amounts, which are popular with the target audience of unions and which the COP themselves are ready to provide.
“Before the crisis of 2008, everyone had their own niche: banks credited individuals and legal entities for amounts from 50 thousand and higher, and the COP lent smaller amounts – from 5 to 50 thousand UAH. But that crisis made its own adjustments, and banks began to engage in consumer lending, ”Volkovskaya explained. However, financiers did not spend much time on small financing. A new credit crisis erupted in 2014: banks faced total defaults on small loans. After that, many suspended such loans.
“But credit unions reacted differently – they reduced the size of loans. Before, they issued UAH 30 thousand, and even UAH 50 thousand, and now the average loan amount is about 12 thousand, ”Volkovskaya said. Such loans are especially in demand in small towns, where wages are 2-3 thousand UAH.
The number of loans has declined. “Until 2009, credit unions annually issued in units of about 1 million loans. Now – about 200 thousand pieces. But, anyway, this is more than banks give out, ”Petro Kozinets, president of the National Association of Credit Unions of Ukraine (NAKSU), told Vesti.
The deterioration of statistics is caused not only by a decrease in the number of cops and a change in their policies, but also by losses due to the annexation of Crimea and the military confrontation in the Donbass. “We have a lot of problems with unions in the ATO zone. Even those who work within a radius of 200 km from this zone are experiencing difficulties, as people have left and are very difficult to find. The cops work there for wear. For example, in Mariupol there are two credit unions. Considering that virtually no banks work there, these unions are the only ones that lend to people, although much depends on repayments there, ”Victoria Volkovskaya emphasized.
Law enforcement officers pay the worst
Most often, credit unions work according to the standard scheme: 25% of their members are depositors who form the resource base for financing, and 75% are borrowers who take loans. If the borrower does not repay the loan, the COP is forced to fulfill its obligations at the expense of reserves.
On average, non-repayment of loans by union borrowers in the market is about 17-18%. But, depending on the region and the specifics of clients of the COP – this figure can vary greatly. “In our credit union, this figure is about 5%. And these are not those loans that are frozen forever. The executive service is still working on them, part of the people themselves return, ”Olga Tugay, chairman of the Kyiv Credit Alliance CS, told Vesti. If we compare with banks, where, according to unofficial data, the level of problems reaches 50% of the loan portfolio, then this figure is not critical.
“Work with debtors of unions is based on an individual approach. Therefore, the level of delay is lower than in banks. A lot of attention is paid to personal acquaintance with the borrower, ”said Victoria Volkonskaya. And she noticed that before the war in the Donbass there were much less defaults (about 5-7%). “The COP, by and large, is a community, an alliance where everyone knows each other. For example, this may be an association of employees of Metrostroy or Antonov plant. But the most problematic unions are those that bring together law enforcement officials. They repay debts worst of all, ”Victoria Volkovskaya assured.
In order to ensure timely return of deposits to their members, the COP is obliged to form reserves for them. “In our country, members of credit unions form reserve capital. We explain to them that this is necessary so that we can reduce interest rates, for example, on New Year’s Eve. Moreover, there is a gradation: the larger the loan, the lower the interest rate. But on average it is 38-40% per annum, ”Olga Tugay said.
40 million in problematic
At the same time, the payment of deposits at the COP is much less problem than in the banking system, experts say “In the market somewhere around 10-20% of credit unions experiencing problems with the return of deposits. And those who do not return at all are about a few dozen, ”Pyotr Kozinets assures.
According to Victoria Volkovskaya, only 4 unions have left the market over the past year and a half due to non-return of deposits. “One of them just ran away, and three more failed to fulfill obligations due to non-repayment of loans. By the way, one of these COPs had the imprudence to give a large number of loans to law enforcement officials, ”she said.
Complicates the situation of unions and the instability of the banking system. Often, the COP keep their reserves in bank accounts, and remain with nothing, in the event of the liquidation of these financial institutions. According to Volkovskaya, about 40 million hryvnias hung in banks recognized as insolvent in 2014-2015.
In this situation, no one expects any noticeable increase in lending by the COP and the emergence of new credit unions. According to Peter Kozinets, over the past year the state has taken a lot of negative steps for credit unions. “For example, we were slapped with the concept of“ profitability ”, and we pay more taxes than banks. Also, since 2009, there has been a need to revise legislation in the context of the Constitutional Court, but this has not been done, ”he says. The expert assures that, if not for these restrictions, the war in the Donbass and the annexation of Crimea, then the CS market “could have grown twice as much every year.”
“As soon as the war ends, the era of credit unions will begin. Typically, the state saves global interests, and people are ignored. But they need to be treated, to learn. People get jobs, salaries rise. In this situation, the population begins to more actively lend, invest, ”summed up Victoria Volkovskaya.